Investing in real estate with a 10 euro note. Here’s the original concept behind Bricks.co, a start-up created in April 2021 by Cédric O’Neill. A somewhat strange model in the world of real estate on paper because Bricks.co does not have the status of a real estate investment company (SCPI), or a real estate crowdfunding platform. What does Bricks.co sell? Contracts for the sale of future income [ou contrats en royalties]. Concrete, the company buys the buildings then divides them into thousands of parts (called bricks), which is 10 euros. Investors saw themselves as entitled to collect part of the rents and the capital gain of a building. However, the company remains the owner and manager of the assets. With stunning promises of profitability (rents and potential capital), between 6% and 14% per annum, the young shoot already has a chief hunting list: 35 properties for a total of 45 million euros, 200,000 are registered on the platform and 45 employees.
Read alsoChallenges selection of 100 start-up investors in 2022
A craze that doesn’t contradict – far from it – is their fundraising at the end of April. While they planned to raise 5 million euros from the platform’s customers, the entrepreneurs got 20 million. It must be said that the promise made to the participants was attractive: investment in start-ups with the same vehicle as for the purchase of shares in buildings, ie, royalty contracts that can be exchanged at any time in the second market.
But the unconventional fundraising attempt was thwarted at first, much to Cédric O’Neill’s regret. “When the competent authorities saw that we had raised funds from 11,500 people, they asked us to change our contracts from royalties to financial securities, because they believed that investing in a start-up is not involved in the same risk of investing in real estate.So we start with an equity format but suddenly, those who decide to stay in fundraising are faced with insecure liquidity and may find their funds blocked. in 2, 3 or 5 years ”, regrets the CEO of Bricks.co. The problem is that the status change was announced after the fundraiser with a Youtube video of less than two minutes announcing the bad news without explaining the reasons for this change.