Lagan Investments, a fund founded by the North's biggest house-builder, Kevin Lagan, has taken a 10 per cent stake in peer-to-peer lender Property Bridges and is to supply it with €5 million in lending capital.
It comes as the online crowdfunding platform said it has raised about €650,000 in a funding round with other backers including Enterprise Ireland, early-stage tech investor NDRC and a number of private investors.
Founded last September, Property Bridges has developed a software platform that connects investors with experienced developers. It is seeking to bring liquidity to the development sector by encouraging everyday investors to back projects from small developers requiring finance of between €300,000 and €3 million.
Property Bridges is aiming to lend some €150 million in construction development loans in total over the next three years as it looks to boost the number of registered lenders it has on its platform from 2,000 to 10,000 by 2022.
The company has secured over €3 million in lending finance to date for four home-building projects in Dublin, Kilkenny, Waterford and Limerick.
The start-up was established by chief executive David Jelly with an aim to "unlock the property market for investors and provide a major source of non-bank finance to the construction sector".
The company allows individual lenders to invest from €500 to €100,000 in any one loan, with an average return of about 8 per cent.
Mr Jelly has more than 10 years' experience working in the finance sector in London and Ireland. Co-founder Marc Rafferty, meanwhile, is no stranger to start-ups, having previously helped establish car-share company GoCar, and Irish peer-to-peer lending platform LinkedFinance, which has provided more than €90 million in funding to businesses.
Industry analysts suggest Lagan Investments paid about €150,000 for its stake in Property Bridges, valuing the start-up at about €1.5 million.
Businessman Kevin Lagan launched Lagan Investments last year with some of the cash from the €520 million sale of his building materials company to British group Breedon.
Lagan Investments has a strong track record in real estate and is delighted to partner with Property Bridges
House-builder Lagan Homes – one of the operations that Mr Lagan kept – plans to expand south and is on the hunt for suitable sites, including in Dublin's commuter belt, where demand for land and housing is high.
That company is also seeking sites in Northern Ireland and Britain, where it has long-established operations. In addition, the Lagan family have also sunk €3 million into the The Vaults, a new interactive tourism project in Dublin city centre.
A third company, Fasthouse, a specialist in rapid-build homes, last month announced deals of three projects in the greater Dublin area, having recently completed 466 holiday homes for the Center Parcs resort in Co Longford. The company has also won a series of other new housing contracts and is installing on sites in Dublin, Kildare, Cork and Offaly as well as a number of sites in the North and Britain.
Kevin Lagan operates Lagan Investments in partnership with his two sons Peter and John.
"Lagan Investments has a strong track record in real estate and is delighted to partner with Property Bridges, which we consider to be a truly transformational business, helping to deliver much needed homes across Ireland," said John Lagan.