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BHIVE Investech will work as a fractional real estate investment platform with its data-driven tech approach; It will democratise the commercial real estate market

Bengaluru, NFAPost: Shesh Rao Paplikar decision to launch BHIVE Investech is yet another momentous journey as an entrepreneur which began by starting co-working space startup BHIVE.

In an interaction with NFAPost on his new venture, he said BHIVE Investech is aimed at democratising the commercial real estate market by providing shared ownership of large value properties and investment opportunity for the Indian middle class.

“We have succeed in getting $1 million seed fund for asset-light FinTech company BHIVE Investech. The seed fund will be used for team building, technological development, legal, compliance and marketing,” he said.

BHIVE Investech now brings long term capital growth potential along with rental yields of over 8% through investment in commercial office real estate.

Data-driven tech platform

Shesh Rao Paplikar commented that BHIVE Investech now heralds the same opportunity to the Indian Middle Class and HNIs through a data-driven tech platform with a highly intuitive investor dashboard allowing for a hassle-free investment experience.

He pointed out the fact that surplus investable capital of the middle-class and HNI’s are usually deployed in rental seeking residential assets and not in commercial real estate. Even though 80% of the surplus wealth of Indians are invested in real estate, Shesh Rao Paplikar pointed out that BIHIVE Investech will bring a change to this practice by coming up with curated investment opportunities that will give investors better and consistent income.

“These investments will not only give Fixed Deposit like monthly yields but also ensures like the Equity or Mutual Fund like a long-term appreciation to retail investors. BHIVE Investech will also provide a seamless diversification mechanism which was not available earlier to the retail investors,” he said.

BHIVE started as the first professionally run coworking brand of Bangalore in 2014 with backing from investors like Blume Ventures, Raghunandan of TaxiForSure, Harshil & Shashank – founders of RazorPay. Today, BHIVE operates properties whose hard asset value is over $30 million. Apart from raising $2 million of equity capital for the workspace business, BHIVE raised about $4 million from HNIs to fund its expansions over the past 2 years.

“In a way, we had already become a wealth management company for HNIs by raising money from them, giving regular reports and giving the returns as promised. We have huge brand equity with the HNI community in our ability to give them returns. BHIVE Investech FinTech entity is a very natural progression of that journey,” said Shesh.

BHIVE Co-Founder & CEO Shesh Rao Paplikar also said the team is overwhelmed by the kind of support the company got from current investors for launching the fintech entity, most of whom are NRIs beyond institutional investors.

“The FinTech entity will add strong value to the existing business by bringing in the capital for growth while it also creates a lot more value to our existing shareholders. This is a US-headquartered company, which came in as a natural choice as most of our investors reside in the US,” said Shesh.

Commercial real estate

He said a significant amount of the customer base for the FinTech platform to invest in commercial real estate will also be coming from the US. “A very senior person who is a veteran in real estate industry and with very strong domain expertise in fractional investment space is coming in as a cofounder to the new FinTech entity,” said Shesh.

BHIVE investor Alok Bajpai who is Global Chief Financial Officer of Netmagic Solutions says BHIVE Investech is another innovative and interesting concept from the BHIVE family, which not only will solve – through technology platform – many business and commercial space-related needs in the community, but will also provide sound financial and investment needs of small and large investors.

“Just the way BHIVE was conceptualised and then executed ahead of its time as a solution to few office-space related gaps in India, this venture showcases the forward thinking and problem-solving mindset of its founders, particularly Shesh,” said Alok Bajpai.

Co-working space business

BHIVE started as the first professionally run coworking brand of Bangalore in 2014 with backing from investors like Blume Ventures, Raghunandan of TaxiForSure, Harshil & Shashank – founders of RazorPay. Today, BHIVE operates properties whose hard asset value is over $30 million. Apart from raising $2 million of equity capital for the workspace business, BHIVE raised about $4 million from HNIs to fund its expansions over the past 2 years.

Fractional Real Estate Investment is an established venture category of FinTech globally but yet nascent in India. Global players such as CADRE, Fundrise, Realty Mogul, Brickwork, etc., have already bagged billions of dollars of equity money from marquee investors gaining the likes of Goldman Sachs, General Catalyst, Guggenheim Partners, and so on. It has been a global success as hundreds of properties are already being fractionalized. This business has already created unicorns and many more are expected to get created around the world given the size of the opportunity.

Indians have always been attracted towards Real Estate, a premise supported by RBI data that shows ~80% of household wealth is invested in Real Estate. As a primary first home, this is understandable.

However, surplus investable capital of the Middle Class and HNI’s has also usually been deployed in rental seeking residential assets. Hence this segment has become overinvested with rental yields languishing at a dismal 2 – 4%. Consequently, the resale market and price appreciation have also suffered over the past few years.

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