FundPlaces is one of Singapore’s newest real estate tech company. They offer investors the chance to invest in institutional grade real estate and in exchange receive something called “Tiles” which the company says is a digital token on a blockchain.
I met up with them during their drinks session and got to ask a few questions on how exactly it works.
My thoughts are that the idea is nothing new – pooling money from individual or corporate investors and buying a property. FundPlaces will then manage the property and maximize its revenue. FundPlaces then takes a certain percentage of the revenue produced by the property and distribute the rest to investors.
The innovative thing here is that investors are issued Tiles, and that the information about Tiles is kept on their private Blockchain. In other crowdfunding schemes, investors simply have a claim on the cash flow of the underlying asset, which may be loans, receivables or company profits. That claim essentially is a document that resides with the company doing the crowdfunding.
In FundPlace’s case, the data is all logged into the Blockchain which makes it tamper free and saves on a lot of time and cost with administrating for thousands of investors.
Once an investor gets a Tile, he or she can choose to sell it to someone else. This is the cool thing – that there is a secondary marketplace for Tiles. This has not been done anywhere else in Singapore, with respect to property ownership.
However, I still had some questions that remain unanswered.
- What if I can’t find someone else to buy my Tile? FundPlaces didn’t answer this. They assumed there will always be someone willing to buy a Tile.
- Where’s the platform to sell a Tile? There isn’t anywhere on their website for me to presently do so, though I understand it may not be built at such an early stage. Even then, the building of a platform to trade secondary Tiles won’t be easy.
The founding team was really helpful to answer my questions, and I found out they were still in talks with MAS on ironing out the details of what exactly a Tile is. Is it an equity or debt instrument, or is it something totally new altogether?
My gut feel is that it could actually fall into one of the two categories that are regulated by MAS, though that remains to be seen. I personally hope there will be some regulation in the sector, but that it should not be so overbearing. This will help enterprising individuals and corporations take advantage of what is happening at the technology front to improve the situation in other non-tech sectors and raise the level of efficiency and productivity.
If you’re an enterprising individual with connections, FundPlaces is also welcoming submission of projects. They will then market the project on their platform to their subscriber base.
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