Tag: fractional real estate

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Strata.

Lack of access to data-driven insights and expertise often leads investors to make unsafe choices in the real estate industry. Sudarshan Lodha and Priyanka Rathore noticed this problem plaguing the industry in their span of careers in commercial real estate.

Thus, Strata was born with the idea to democratize investment opportunities in CRE (Commercial Real Estate) and unlock value for investors, at scale. Strata’s goal is to achieve this with the in-depth real estate expertise and strong data analytics foundation through its fractional investment model.

StartupTalky interviewed Sudarshan Lodha (Co-founder, Strata) to know the Success Story of Strata along with getting a glance on Strata Business Model, Funding, Revenue Model, How Strata Started and more….

Strata – Company Highlights

Lets go through the Journey of Strata –

Strata – About and Mission
Strata – Founders and Team
Strata – Ideation and Startup Journey
Strata – Startup Launch and Customer Acquisition
Strata – Products/Services and USP
Strata – Name Meaning and Logo
Strata – Business Model and Revenue Model
Strata – Funding and Investors
Future of Fractional Real Estate Investment
Strata – Growth and Future Plans
Strata – FAQs

Strata – About and Mission

Strata offers investors an opportunity to invest in premium commercial properties at affordable prices with data driven insights. Fractional ownership in commercial real estate provides platform where number of investors join together to invest in a real estate asset so that all of them can benefit from a share of the income that the asset generates, and any appreciation in the value of the property.

Strata’s Mission – Accessibility, Transparency, Affordability in Commercial Real Estate (CRE) Investment

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Strata – Founders and Team

Sudarshan Lodha (CEO) and Priyanka Rathore (COO/CTO) are the founders of Strata

Sudarshan Lodha (Co-founder & CEO, Strata)

Sudarshan is the CEO of Strata and handles the forefront of the business. Sudarshan Lodha, a successful lawyer, brings over 9 years of leadership experience in real estate & private equity law, having successfully handled several complex legal cases and venture capital transactions, representing private equity deals worth over $1.4 billion.

Priyanka Rathore (Co-founder & COO/CTO, Strata)

Priyanka is the Co-founder, COO/CTO of Strata and takes care of the tech and operational bit of the company. Priyanka has over 8 years of experience in financial planning and analysis with D.E. Shaw and WeWork. As the lead real estate analyst, her in-depth understanding of deal economics and real estate portfolio management played a vital role in WeWork’s expansion in India.

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Strata – Ideation and Startup Journey

Strata’s journey began in 2019.  The idea for Strata came from the personal experiences of Sudarshan and Priyanka. Their career in the commercial real estate industry showed them that most investors in India were uncertain about investing in real estate. It is mainly because of lack of awareness, knowledge and inaccessibility of smart data in real estate that can help to decide on investments.

In addition, when it comes to commercial real estate it is always seen as an investment category for investors falling in the top of the pyramid. This is where Strata’s fractional investment model and offerings come into play. It allows one to invest and own a share of prime commercial property at minimal capital.

There were three ideas that Sudarshan and Priyanka had in mind regarding fractional investment –

1. Reducing the high capital requirement – At Strata, the ownership of premium commercial properties are broken down into more easily investable portions or ‘fractions’ which come in small ticket sizes. Not only does this make commercial real estate more accessible, but it also means that an investor can diversify their investments across multiple properties and locations, thus reducing their risk.

2. Brings in expertise – Finding the right commercial property to invest, takes time, resources, and ample expertise. Strata’s team scours hundreds of properties and measures over a dozen different parameters before zeroing in on one that has the best combination of yield, stability, and value appreciation.

3. Improves liquidity – Owning to the easily transferable nature of the fractions, Strata brings liquidity to an otherwise rigid marketplace. Investors can list their fraction on its proprietary resale market, sell their holdings offline through a personal network or via Strata’s dedicated secondary window.

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Strata – Startup Launch and Customer Acquisition

Word of mouth helped Strata acquire its first 100 investors. Strata’s business model is B2B, hence speaking to investors at personal level acquainted them to the idea of fractional investment whilst building confidence and trust in the brand. The concept of fractional investing is very big in USA and Europe and since the Strata team are bullish on B2B investment themselves, making these HNI investors understand the model was quite easy.

Strata’s transparent and data driven business model has helped it a lot in retaining clients. Strata’s Dashboard tracking system helps investors to track their investments. It’s exclusive partnership with PropStack has helped it a lot in order to keep the transparency with the investors

Strata – Products/Services and USP

Fractional investment allows the ownership of a fraction of a property by the investor. It is a very popular type of investment avenues in the USA. Whereas, fractional investment is one of the fast evolving investment concepts in India. Many people in India still don’t know that they can own a premium commercial properties at an affordable pricing. There is a misconception that commercial properties are only for HNIs.

Fractional investment solves the misconception and democratizes the ownership of premium properties in an inexpensive manner. Investors earn higher rental yields and much better capital appreciation in the commercial properties which is not possible in case of residential property investments.

At Strata, the unique part of the business is that it is pure play backed by data. Data driven investment approach with insights on properties, locations, pricing and building specifications give a confidence and build trust among the investors. In addition to it the investment process are fully transparent in nature. Strata’s platform provides access to detailed reporting and fair pricing, declared upfront.

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Strata – Name Meaning and Logo

Strata title is a form of ownership devised for multi-level apartment blocks and horizontal subdivisions with shared areas. The word “strata” refers to apartments being on different levels. Lots are either apartments, garages or storerooms and each is shown on the title as being owned by a Lot Owner.

Strata’s logo represents a robust and stable shape enclosed with Strata’s initials, conceptualized from the floor plans of the opportunities offered for ownership and growth by the organization.

Strata – Business Model and Revenue Model

Strata’s business model is B2B. Strata’s foundation is based on strong data analytics through its fractional investment model. Fractional ownership in commercial real estate provides platform where number of investors join together to invest in a real estate asset so that all of them can benefit from a share of the income that the asset generates, and any appreciation in the value of the property.

Strata’s Revenue model comprises of Management fee and profit share/performance fee.

Strata gets 0.5% to 1% as an annual property management fee from the investors. The management fee is a monthly charge on gross rent enjoyed by the investors. It is designed to cover the management of the SPV(Special Purpose Vehicle i.e. a partnership firm formed among the investors) and its assets.

Whereas the profit share/performance fee is payable on exit. This has been designed to reward investors, should the investment offered by Strata prove to be successful for the investor.

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Strata – Funding and Investors

Strata is backed by marquee investors SAIF Partners, Mayfield Ventures, and PropStack. It recently raised Rs 140 crore to acquire 3 pre-leased warehouses amidst the COVID-19 pandemic.

Strata’s funding details are as follow-

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Future of Fractional Real Estate Investment

Strata’s founders’ view –

Considering the current scenario, rising volatility of the equity markets, extended periods of low interest rates and assets failing to offer intended results are driving investors, especially the long-term ones in deploying their funds in the asset class that is more reliable and offer better returns. With more and more awareness on the benefits of investing in premium commercial real estate through fractional route will help the industry to grow.

As a brand, Strata is focused on bringing in transparency and a data-driven approach to investments in real estate. Strata’s team is razor focused on growth and plan to cross 200 Cr. in AUM in 2021 and touch 1000 Cr. by 2022.

We are thus aiming to create India’s largest tech-enabled real-estate investment platform with our fractional investment model – Says Sudarshan (Co-founder & CEO, Strata)

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Strata – Growth and Future Plans

Strata aims to create India’s largest tech-enabled real-estate investment platform with its fractional investment model. It plans to do this by expanding Strata’s partner base and by continuing to offer investors the best opportunities in commercial real estate. Strata’s team is razor focused on growth and plan to cross 200 Cr. in AUM in 2021 and touch 1000 Cr. by 2022.

Additionally, the team is also excited about the strategic investment from PropStack as it will help Strata get exclusive CRE intelligence and analytics, which in turn, will allow it to have an edge over other platforms in the ecosystem. Strata have over 1,500 users and has over 150 active investors on the platform.

Currently, Strata is operational in Bengaluru and Mumbai, It aims to create new investment opportunities in premium commercial properties and expand to other metro cities while strengthening the existing tech stack.

“Strata is constantly innovating and something we hope to soon offer is the ability for investors to finance their investment with a personal loan” – Says Sudarshan.

Strata – FAQs

What is Strata?

Strata offers investors an opportunity to invest in premium commercial properties at affordable prices with data driven insights. Fractional ownership in commercial real estate provides platform where investors join together to invest in a real estate asset and share the income that the asset generates.

Who are the founders of Strata?

Sudarshan Lodha (CEO) and Priyanka Rathore (COO/CTO) are the founders of Strata

What is fractional ownership in real estate?

Fractional ownership in commercial real estate provides platform where number of investors join together to invest in a real estate asset so that all of them can benefit from a share of the income that the asset generates, and any appreciation in the value of the property.

How does Strata make money?

Strata’s Revenue model comprises of Management fee and profit share/performance fee. Strata gets 0.5% to 1% as an annual property management fee from the investors. The profit share/performance fee is payable on exit.

Who is the CEO of Strata?

Sudarshan Lodha is the co-founder and CEO of Strata.

When was Strata founded?

Strata was founded in 2019, Bangalore.