Commercial real estate (CRE) investment platform Strata announced today that it has raised $6 Mn in a Series A round co-led by Kotak Investment Advisors Limited , Gruhas Proptech (an exclusive fund by Nikhil Kamath of Zerodha and Abhijeet Pai of Puzzolana Group for proptech investments and special situations), Sabre Investments (an investment arm of Rahul Talwar, Promoter Family of DLF). This round also saw participation from Elevation Capital, Mayfield India and Gemba Capital.
Previously, in March, 2020, the company had raised $1.5 Mn in seed funding co-led by Elevation Capital and Mayfield India along with participation from PropStack angel investors.
As per a company statement, Strata plans on using the capital to expand aggressively in the next year, taking its current asset under management (AUM) of approx. INR 330 Cr to INR 1500 Cr by FY21-22. The company is eyeing to spread its geographical footprint across key markets of Mumbai, Hyderabad, Chennai, Bengaluru, Delhi and Pune. The company also plans to accelerate product development and introduce new investment offerings to yield greater returns for its investors in the long term.
Besides, the company is also aiming to double its headcount in the current fiscal year. It is eyeing fresh recruits for the role of tech and product managers, investment managers and asset managers who will aid its growth plans of building a strong asset portfolio across the country.
Founded in 2019 by Sudarshan Lodha and Priyanka Rathore, Strata allows investors to own and sell units of pre-leased, grade-A commercial properties such as office spaces, warehouses, industrial assets, etc.
Commenting on the funding, Sudarshan Lodha, CEO, Strata said, “Our aim is to democratise CRE as an asset class like never before in India.”
Srini Sriniwasan, MD, Kotak Investment Advisors Limited said, “Strata, in a very short span of time, has built a powerful asset class that is easily accessible to the masses. Investment in CRE has predominantly remained off-limits for most sections of the investor community in India. ”
The company claims that currently it has over 15,000 users on the platform along with an active base of more than 1,000 investors globally.
Unlike popular notion, 2020 was not a very bad year for the real estate sector primarily due to the growth of the proptech sector. Commercial real estate investing was only a small component of the proptech sector.
Simply put, Proptech is a term that refers to the application of digital technologies in the real estate industry. It isn’t just about applying digital technology to sales and marketing of real estate – its scope includes everything from project design and construction management to new innovative financing mechanisms, property management and real estate investments. Currently, the real estate sector is around 6-7% of the total GDP.
Additionally, the commercial real estate sector is expected to grow significantly in the coming years due to the entry of the Real estate investment trust (REIT). Real estate investment trust (REIT), a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the real estate sector by monetising rent-yielding assets.
With the onset of REITs, the commercial sector could witness better capital appreciation, as compared to the residential sector. The formation of REITs isn’t just a great boon to investors, but an advantage to the developers as well. For developers, it could unlock the value of their commercial assets. They can look at REITs as a vehicle to exit, at an extremely attractive capitalisation rate, thereby, reducing their high-level debts.