Meet InvestBay: The tokenization platform that brings fractional investment and hassle-free ownership into real estate.
We sat down with Daniel Rajnoch, CEO and co-founder of InvestBay to talk more about what they do and their plans for the future.
Hi Daniel, tell us a bit about your personal journey towards founding InvestBay. How did you get here?
I was born in Moravia and when I was about 10 years old my dad started to operate a hotel as manager. It determined my path for the first part of my life, and I started to be involved in hospitality and gastronomy. And after one year studying in Australia, I came back to the Czech Republic and started a restaurant Solidni nejistota. Then I sold it and got involved in more tech companies – I started Yourpass, which is digitizing loyal cards. And then I got to InvestBay.
What prompted you to start developing InvestBay? What did you see as fundamentally wrong with the way finance works right now?
There is no easy way to invest in properties in small sums or in more diversified portfolios. If you want to invest in a big company, you do not have to buy the whole company. You do not even have to buy one whole share, since there are plenty of opportunities to get them in fractions. But when it comes to real estate it is a totally different story. Or even more complicated because, when you become a real estate owner it comes with responsibilities – taking care of the economic function of property, dealing with leases, maintenance.
Who is InvestBay for and what problem are you solving?
InvestBay is for all retail investors who are looking for better ways to diversify their portfolio and secure their money against inflation. For this situation Real Estate represents a good asset that almost everybody would like to have and even should have in their portfolio. To them we provide hassle free ownership starting as small sums as 500 EUR.
How big is the team and why are they a good match for this project?
We are 4 founders and each of us covers different expertise. Jirka is covering our technology, development of our platform for investment and our tech partner for payments and KYC/AML. Lukas is focused on marketing, communication and customer experience. Andrew is experienced in real estate so can find best opportunities to invest in and then also oversees operation of them so we can make more money for our clients. What I like is the experience of the team, because founder age is from 35 to 50, so all are well established in their field with proven track record.
What got you interested in working on blockchain and cryptocurrencies?
It is opening a range of new opportunities in how you deal with assets, transferability and transparency. Especially in tokenisation it opens possibilities of what you can do with real and physical assets. In the same way I would call us blockchain minimalists. We use it as a technology, which is suitable for what we are building and even more for what we plan to build. However, we do not communicate it towards clients as a benefit, we are not part of crypto hype. We do investments in real estate, not in crypto. Blockchain is just tech under the hood.
Let’s talk more about your products. What would you say distinguishes you from other savings solutions? What is your “killer app?”
We build InvestBay in a way it is like real ownership only in fraction. You have two revenue streams – from rents and capital increase and secured in cadaster via collateral agent. And its hassle-free ownership, cause we will take care of everything – finding tenants, maintenance etc. That is, investment in real assets, in fraction and hassle free.
Can you tell us a bit more about how your technology really works? How unique is your solution?
Technology wise it is quite simple, and I would say we are almost “no code”. We connect 3 different partners – tokenization platform Digishares, payment provider Payout and KYC/AML from SumSub. And we bring real estate to it and it is done. What is really unique is the legal framework which we created, that enables us to make it. We also focused on trust, that is what we introduced Collateral agent, which connects clients and records in cadaster.
What have been your team’s biggest personal or professional challenges in making this project a reality?
Well definitely the legal aspect of it. Since it is quite new, the regulatory framework is still unclear or non-existent. We must spend a lot of time and money on lawyers. I am happy we made it because we heard a lot “it can’t be done” or “it is too complicated”.
Who is the ideal customer for InvestBay? What do people need to get started with InvestBay?
Ideal customers are people who have some experience in investment, and they are looking for ways to protect their money against inflation. In a well balanced portfolio, it is great to have real estate because it has a different risk profile and low correlation with other asset classes like bonds and stocks. Problem is that it comes with a high price in millions, and you have to buy whole or nothing. Well until now, when we introduced InvestBay.
Otherwise nothing special is needed, you can just register and its minimum investment is 500 euro.
What do you hope InvestBay is going to be in 5 years, as a business, or as a technology. What would be your ideal scenario?
We see InvestBay as a complex fintech startup – that has 3 main lines. Investment, payment, lending. Investment is something we have right now and what I spoke about so far. Payment, we plan to launch soon, so directly with your investment account you would get a payment card which would be backed by the value of investment tokens. And of course, if needed those tokens you will be able to use as a collateral and lend money against, in case you need them however you don’t want to exit your investment.
Also, we will have a community of investors and a network of vacation rental properties, which you will be able to utilize – investors can get benefit of cheaper holidays offers on attractive places and it will provide better financial performance of investment – i.e., lower intermediary fees and higher occupancy rate.
Has there been a major surprise for you since joining the StartupYard program? Did you learn something you weren’t expecting to?
I appreciate their positive attitude and active involvement in searching for potential investors. So, it helps a lot in our current fundraising stage. Otherwise, I must say that it is a well-organized program. I have experience with many programs like that, both from mentor and mentee side, and this is one of best.