Fraxtor Private Limited, a digital co-investment platform specializing in real estate, has attracted over S$9 million ($6.75 million) in private investments from its community of Accredited Investors (AIs) who are mostly from Singapore and Australia. In a statement, the company implied that it was unexpected for them to raise the amount over the past nine months given the lingering effects of COVID-19.
The investments secured are set to fund four projects that have been in the pipeline since the second quarter of 2020. These projects include two landed residential developments in Singapore, a student accommodation project in the United Kingdom, and an industrial development in Singapore.
The most recent funding exercise Fraxtor had was closed in the latter part of November 2020, during which the company raised around S$3.4 million ($2.5 million). This amount is set to be used in Fraxtor’s first landed residential development project in the northeastern part of Singapore. The project has an estimated gross development value of S$13.2 million ($9.9 million). The company projects an internal rate of return (IRR) of 15 percent annually (over a two-year period) for this project.
Fraxtor partnered with multiple real estate fund managers such as ZACD Capital and Q Investment Partners to provide access to top-tier investment opportunities with relatively low capital requirements. It also forged a partnership with the Australia-based property investment services provider SMATS Consortium and Canada-based ARCH Corporation, which specializes in offering unique investment opportunities to high net worth investors and global investment institutions.
Oliver Siah, the Chief Executive of Fraxtor, says that the company’s partnerships allow it to enhance its services. “Our partnership with other Fund Management Companies and property developers allows us to offer a more diverse selection of real estate investment products to our co-investors. We look for unique asset types which have structural shortages or strong growth potentials,” Siah explains.
Founded by experienced real estate investors, Fraxtor offers distinctive real estate investment opportunities by incorporating blockchain technology. The company provides a digital co-investment platform designed to be convenient, easy to access, trustworthy, and diversified.
Fraxtor operates in a way similar to a private equity real estate fund. It has secured a class exemption to deal in securities and fund management under Singapore’s Securities and Futures Act. With these, Fraxtor targets niche investment opportunities to allow Accredited Investors access to various investment opportunities they would otherwise be unable to access because of the size of the investment and sourcing expertise needed.
The Singaporean FinTech startup’s business model harnesses the extensive real estate investment experiences and expertise of its founders as well as the reach and network of its partners. Fraxtor has developed a system wherein it curates the best possible real estate opportunities for its community of co-investors and minimizes investment entry barriers by allowing investors to invest “fractionally.”
Fraxtor’s company name is a portmanteau of the words “fractional” and “investor.”
To facilitate “fractional” co-investment, Fraxtor employs blockchain technology, smart contracts, and asset tokenization. “We believe that the blockchain technology can make Fraxtor’s successful business model more scalable and accessible while at the same time giving investors full control over their portfolio in a secure and transparent manner,” says Marcelo Garcia Casil, Chief Technology Officer, Fraxtor.
Fraxtor looks forward to doing more business as it seeks asset enhancement opportunities in Tokyo, Berlin, and Melbourne. “We are looking at properties over the world and these can range from hotels, commercial buildings, and even nursing homes. These are completed projects where we feel that we are able to strategically reposition the asset to increase the return for our investors,” says Fraxtor’s CEO.
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