Startup Q&A: Dan Gandesha, Founder & CEO, Property Partner
Dan Gandesha is the founder and CEO of Property Partner, one of the hottest startups in the UK property and investment sector, which is advancing steadily towards its goal of global success. Dan took to the AGENT Startup Hotseat to chat about the early days of his startup.
Dan Gandesha had a simple vision for his startup back in 2013: to create a ‘stock exchange’ for property, by purchasing rental properties and enable investors to invest anything from £50 upwards, and earn dividends from their share of the rental income.
The only difficulty was that although as a VC, Dan Gandesha was convinced by the viability of the idea, he didn’t know anything about property. That did not prevent him from setting to work, handing in his notice at Sky while setting to work on his grand ambition and preparing to take the startup leap of faith.
Property Partner was launched in January 2015, and within weeks was making waves within the worlds of property and investment.
Backed financially by leading European investors, Property Partner has grown fast. In its first year, the firm headed by Dan Gandesha crowdfunded 150 properties, with more than £22m invested on the platform, while £4.1m had been invested its secondary market, which allows investors to trade shares with other investors.
Now boasting more than 35 employees, Property Partner’s goal for 2016 is for a ten-fold increase in its listed properties across the UK, working towards the ultimate aim: to build a global property stock exchange.
Therefore, we’re really glad at AGENT that Dan Gandesha briefly put his plan on hold for long enough to not only climb into the AGENT Startup Hotseat, but also to provide such detailed and thought-provoking answers to our questions.
1. Very simply, what does your company do?
Property Partner harnesses the power of crowdfunding to allow anyone to invest in, and trade, residential property. Our platform, which is regulated by the Financial Conduct Authority, allows people to buy shares in tenanted properties instantly, with no need to handle the purchase, mortgage, legal or maintenance fees. Investors receive their share of the rental income as a dividend and capital returns if or when they sell.
The minimum investment is £50, making it easy for investors to diversify by buying stakes in multiple properties across multiple locations. Just 18 months after our launch, more than 7,750 investors have funded the purchase of 229 properties worth over £33m.
2. What was the ‘Eureka!’ moment?
Then one day, as I was walking along the Upper Richmond Road, I saw a ‘For Sale’ sign and an idea popped into my head. Imagining a stock market ticker running on the outside of that property, I asked myself why the property market couldn’t be a little bit more like the stock market? With the stock market, if I want exposure to a specific company, I can buy a piece of it rather than the whole thing. While I own it, I receive an income stream in the form of a dividend, and when I want to exit, I can do so on platform at a price that reflects the underlying value of my asset. Wouldn’t it make sense to use the cash we’d set aside as a deposit to instead buy shares in a property or a basket of properties we liked instead?
Fired up, I set to work on the complex task of bringing my idea to life—in other words, essentially, building a stock market for property.
3. What were you doing before starting?
Before starting Property Partner I worked at Sky. My job was to invest in startups as a corporate VC. By starting my own business I moved to the other side of the table, but that background gave me a good understanding of the process and an excellent network of contacts. I raised the first financing round while on my notice period, when the business was just a Powerpoint deck. This capital allowed me to make my first hires, and six months later we had developed the first version of the product.
4. How are you funded?
We are fortunate to have the backing of world-class venture capitalists Index Ventures, Octopus Ventures, Dawn Capital and Seedcamp, as well as high-profile board members from the worlds of property and finance.
In March 2016, Property Partner successfully completed a £15.9m ($22.4m) funding round, taking the total amount invested in the company to £22.5m ($31.7m). Property Partner has built best-in-class property, technology, product and marketing teams to ensure that all areas of the business grow rapidly and in sync.
5. What advice would you give to other entrepreneurs starting their own company?
Self-belief, together with self-awareness, is key. Double down on your strengths, and make the right hires to compensate for your weaknesses. When I came up with the idea for Property Partner I had no experience in property, so surrounding myself with a team with the expertise I lacked was absolutely vital.
I first came across Rob Weaver, our Director of Property, at the RICS annual conference where he was keynote speaker as Global Director of Residential Property at RBS. He was the ‘big cheese’ in property. We were half a dozen guys in a small office in Borough. I suspected he might be out of reach but I thought, ‘what the hell…’.
I sent a cold email; several in fact, as the address on his bio was wrong so I had to guess combinations. Finally I got lucky with one that didn’t result in a bounce. Rob responded with a deafening silence.
Then we secured a £1.25m seed funding round. The game had changed. Five months after my first, somewhat audacious approach, Rob joined the company. Our current estimated return on investment stands at 10% per year, and much of this performance is down to Rob’s incredible industry contacts, experience and nose for a good deal. The lesson here is to surround yourself with an all star team and to do whatever it takes to get that team on board.