We are delighted to share a significant milestone in our journey to be the #1 global marketplace for fractional real estate. Investments made into Shojin through a convertible loan as part of the Future Fund have officially converted into equity in our rapidly growing business.
A brief dive into the Future Fund
In 2020, the British Business Bank launched the Future Fund, a strategic initiative aimed at assisting high-growth businesses in securing funding during the tumultuous times of the Covid-19 pandemic. This move was particularly crucial when the venture capital market had come to a near standstill.
The mechanics of the Future Fund were simple yet impactful: a pound-for-pound matching investment from the British Business Bank, up to £5 million, for every new investor coming into the business. What made it even more beneficial was the provision that, if a business surpassed its original funding amount through subsequent financing, the debt and associated interest would seamlessly convert into equity.
Shojin's journey with the Future Fund
In December 2020, Shojin was privileged to receive a combined investment of £1.72 million, with individual investors contributing £860,000, matched by the British Business Bank. In return, Shojin issued a convertible loan note, carrying an 8% per annum interest rate, to the investors, including the Future Fund.
As our journey progressed and Shojin attracted further capital, surpassing the initial funding amount, the Future Fund exercised its right to convert the convertible loan into equity. Future Fund investors were granted an attractive offer: the ability to convert to shares at a 20% discount to the lowest subsequent sales price, coupled with a 10% discount on the conversion of interest due.
Future Fund's stake in Shojin
This strategic move resulted in the Future Fund acquiring an equity stake of approximately 5.16% in Shojin as of December 2023. This not only strengthens our financial foundation but also solidifies our commitment to delivering value and growth to our stakeholders.
“Shojin has grown significantly in the past few years with the share price increasing from £500 to £1,029 per share, and we forecast a 5-9x growth in the next few years, so this has been, and will continue to be, a very good investment for the Future Fund. Their investment will grow along with other shareholders,” said Noil Porter, Chief Financial Officer at Shojin.
“The funding has helped significantly because it came as debt and allowed us to navigate through the challenges of the pandemic. The Government has benefitted from a 57% increase in their share value over 36 months.”
The British Business Bank now has a portfolio of successful, growing businesses like Shojin from the Future Fund. Like any investor and shareholder, it will receive regular management information and business performance reports from Shojin on a quarterly basis.
“This is a real success story for Shojin, investors and the UK Government,” added Mr. Porter. We are delighted to be adding significant growth in value to all our investors including the UK Government."
A shared journey
We would like to thank all our investors for being an essential part of the Shojin community. Here's to the continued success of our collective journey.
Our pre-IPO fundraise is open; we’re raising £4.9m, expected to be our last private raise ahead of a planned IPO in 2026. Our current valuation is £65.8m and our target is to increase this valuation to £588m by 2026.
For more information on this opportunity to invest in a British Business Bank backed company, click here.
