Toronto-based FinTech startup BuyProperly has secured a $2 million CAD pre-seed round to fuel the growth of its online fractional real estate marketplace, which allows users to invest in portions of residential properties for as little as $2,500.
The round was led by Nurture Ventures, and also saw continued participation from Fastbreak Ventures and angel investors, including Andrew Graham and Eva Wong of fellow Toronto FinTech company Borrowell.
Khushboo Jha said that
for many, investing in real estate is “like trying to catch a moving train.”
BuyProperly aims to make real estate investing accessible to everyone. The startup plans to use the fresh funding to strengthen its artificial intelligence (AI)-powered property identification model and expand by adding new properties across Canada and the US.
According to the company, demand for BuyProperly’s investment platform has increased significantly over the past year. “As you can imagine, the amount of customer interest that we’ve seen on this front has been enormous, and, with COVID, that has actually only gone up,” Khushboo Jha, BuyProperly’s founder and CEO, told BetaKit.
The startup’s online marketplace allows retail investors who might not otherwise afford to buy properties outright, to invest in real estate by purchasing a fraction of a home or condo. According to Jha, when sold, the property goes straight from the seller to investors.
Investments through BuyProperly typically take place over a five-year period. BuyProperly makes money by charging a management fee for managing the property during this time.
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BuyProperly’s platform uses AI in two ways: to spot real estate trends and help users invest in undervalued assets, and to make fast decisions based on property histories and descriptions by running natural language processing on notes about them.
“Since we are using artificial intelligence, we are able to scan through troves of data very quickly and identify what’s a good property to invest in and what properties we should stay away from, in addition to identifying the neighborhoods that we believe are underserved or undervalued,” said Jha. “That’s how we are able to identify properties that are giving returns as high as 20 to 40 percent.”
BuyProperly focuses mainly on single-family residential homes, meaning houses and condos. The startup’s platform is currently limited to Canadians, and most of the properties it currently offers are located in Ontario, in places like Toronto, the GTA, Hamilton, Oakville, and the Welland-Niagara area.
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“The market need for fractional real estate investing is clear through the customer growth BuyProperly has seen in only a short amount of time,” said Saurabh Dutta, partner at Nurture Ventures. “I am excited to continue to be a part of this journey as the BuyProperly team enters a new phase of growth.”
Prior to founding BuyProperly, Jha worked at Amazon in a variety of different roles, including as the language technologies product lead for Alexa. Jha said she launched BuyProperly in 2019 after realizing that even she, as a responsible saver, couldn’t afford to invest in real estate.
“Now more than ever, real estate is seen as an inaccessible investment option and our mission at BuyProperly is to prove this sentiment wrong and offer an accessible, high yield entrance into the real estate market,” said Jha.
Jha said that, for many, investing in real estate is “like trying to catch a moving train.” She also added the typical property-buying process is long and complex. BuyProperly attempts to solve for this by allowing users to invest in as little as seven minutes.
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“The fact that you can start investing and putting your money in for as low as $2,500 suddenly opens the door for almost everyone,” said Jha. “We see young Canadians investing with us and excited about the fact that they can actually win a share of a property right now because this was [previously] a distant dream for some of them.”
The startup currently has seven employees and is looking to add three to five more in the next year in AI, sales, and business development roles. BuyProperly also plans to add properties in Quebec, Nova Scotia, New Brunswick, and Alberta.
“The fact that you can start investing and putting your money in for as low as $2,500 suddenly opens the door for almost everyone,” said Jha. “We see young Canadians investing with us and excited about the fact that they can actually win a share of a property right now because this was [previously] a distant dream for some of them.”
