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Why Fundrise's Business Model is so successful?

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Fundrise’s Company Overview


Fundrise is a pioneering real estate investment platform that leverages technology to democratize access to high-quality real estate assets. Established in 2012, Fundrise has transformed traditional real estate investment models by allowing individuals to invest directly in a diversified portfolio of commercial and residential properties. Through its online platform, Fundrise provides a user-friendly interface that enables investors to build and manage their own real estate portfolios, starting with relatively low investment amounts. The platform employs an innovative approach, utilizing eREITs (electronic Real Estate Investment Trusts) and other investment structures to pool funds from many investors, providing them with the benefits and returns traditionally reserved for institutional investors. Fundrise is the first investment platform to create a simple, low-cost way for anyone to access real estate's historically consistent, exceptional returns. Diversify into real estate today with just $100. Fundrise is the first investment platform to create a simple, low-cost way for anyone to access real estate's historically consistent, exceptional returns. Diversify into real estate today with just $100. Fundrise is an online investment platform that allows you to own shares in real estate projects and earn estimated returns of 8.7% to 12.4%. The company is based in Washington, District Of Columbia. The business model of Fundrise revolves around connecting individual investors with real estate opportunities that were historically only accessible to a select few. Fundrise identifies and acquires various real estate assets, including apartment complexes, commercial buildings, and development projects. These assets are then bundled into investment products, such as eREITs or eFunds, made available to investors on the platform. Investors can choose from different investment plans based on risk tolerance and financial goals. Fundrise generates revenue through management fees, asset management fees, and performance fees tied to the success of the investments. This model aligns the interests of Fundrise with those of its investors, as the platform only earns fees when investors realize returns on their real estate investments. Fundrise's innovative approach has democratized real estate investing, providing a new avenue for individuals to participate in the real estate market and build wealth over time.

https://fundrise.com/

Country: Washington DC

Foundations date: 2010

Type: Private

Sector: Financials

Categories: Real Estate


Fundrise’s Customer Needs


Social impact:

Life changing: self-actualization

Emotional: rewards me, design/aesthetics, attractiveness

Functional: saves time, makes money, reduces risk, reduces cost, informs


Fundrise’s Related Competitors



Fundrise’s Business Operations


Access over ownership:

The accessibility over ownership model is a business concept that allows consumers to utilize a product without owning it. Everything serves a purpose. As a result, consumers all across the Western world are demanding more value from their goods and services, and they are rethinking their relationship with stuff.' Furthermore, with thriving online communities embracing the idea of access above ownership, the internet is developing as a robust platform for sharing models to expand and prosper.

Crowdfunding:

Crowdfunding is the technique by which a large number of people contribute to a project. Contribute modest sums of money to support a new business endeavor. Crowdfunding leverages the ease of accessing vast networks of people, connecting investors and entrepreneurs through social media and crowdfunding websites. It can increase entrepreneurialism by widening the pool of investors further than the traditional ring of owners, relatives, and venture capitalists.

Customer data:

It primarily offers free services to users, stores their personal information, and acts as a platform for users to interact with one another. Additional value is generated by gathering and processing consumer data in advantageous ways for internal use or transfer to interested third parties. Revenue is produced by either directly selling the data to outsiders or by leveraging it for internal reasons, such as increasing the efficacy of advertising. Thus, innovative, sustainable Big Data business models are as prevalent and desired as they are elusive (i.e., data is the new oil).

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Digital:

A digital strategy is a strategic management and a business reaction or solution to a digital issue, which is often best handled as part of a broader company plan. A digital strategy is frequently defined by the application of new technologies to existing business activities and a focus on enabling new digital skills for their company (such as those formed by the Information Age and frequently as a result of advances in digital technologies such as computers, data, telecommunication services, and the World wide web, to name a few).

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Direct selling:

Direct selling refers to a situation in which a company's goods are immediately accessible from the manufacturer or service provider rather than via intermediate channels. The business avoids the retail margin and any extra expenses connected with the intermediaries in this manner. These savings may be passed on to the client, establishing a consistent sales experience. Furthermore, such intimate touch may help to strengthen client connections. Finally, direct selling benefits consumers by providing convenience and service, such as personal demonstrations and explanations of goods, home delivery, and substantial satisfaction guarantees.

Equity crowdfunding:

Equity crowdfunding refers to the online sale of private business stocks to a pool of investors. Investors provide money to a company in exchange for a stake in that business. If a company succeeds, its value increases, as does the value of a stake in that business ? and vice versa. Because equity crowdfunding includes investing in a commercial company, it is often regulated by securities and financial authorities.

Experience selling:

An experience in the sales model describes how a typical user perceives or comprehends a system's operation. A product or service's value is enhanced when an extra customer experience is included. Visual representations of experience models are abstract diagrams or metaphors derived from recognizable objects, actions, or systems. User interfaces use a range of experience models to help users rapidly comprehend what is occurring in the design, where they are, and what they may do next. For example, a software experience model may depict the connection between two applications and the relationship between an application and different navigation methods and other system or software components.

Lock-in:

The lock-in strategy?in which a business locks in consumers by imposing a high barrier to transferring to a competitor?has acquired new traction with New Economy firms during the last decade.

Low cost:

A pricing strategy in which a business provides a low price in order to drive demand and increase market share. Additionally referred to as a low-price approach. The low-cost model has sparked a revolution in the airline industry. The end-user benefits from low-cost tickets as a result of a revenue strategy that seeks various sources of income. Ryanair was one of the first businesses to embrace this approach.

Online marketplace:

An online marketplace (or online e-commerce marketplace) is a kind of e-commerce website in which product or service information is supplied by various third parties or, in some instances, the brand itself, while the marketplace operator handles transactions. Additionally, this pattern encompasses peer-to-peer (P2P) e-commerce between businesses or people. By and large, since marketplaces aggregate goods from a diverse range of suppliers, the variety and availability are typically greater than in vendor-specific online retail shops. Additionally, pricing might be more competitive.

Peer to Peer (P2P):

A peer-to-peer, or P2P, service is a decentralized platform that enables two people to communicate directly, without the need for a third-party intermediary or the usage of a corporation providing a product or service. For example, the buyer and seller do business now via the P2P service. Certain peer-to-peer (P2P) services do not include economic transactions such as buying and selling but instead connect people to collaborate on projects, exchange information, and communicate without the need for an intermediary. The organizing business provides a point of contact for these people, often an online database and communication service. The renting of personal goods, the supply of particular products or services, or the exchange of knowledge and experiences are all examples of transactions.

Revenue sharing:

Revenue sharing occurs in various forms, but each iteration includes the sharing of operational gains or losses amongst connected financial players. Occasionally, revenue sharing is utilized as an incentive program ? for example, a small company owner may pay partners or colleagues a percentage-based commission for recommending new clients. Occasionally, revenue sharing is utilized to share the earnings generated by a corporate partnership.

Self-service:

A retail business model in which consumers self-serve the goods they want to buy. Self-service business concepts include self-service food buffets, self-service petrol stations, and self-service markets. Self-service is available through phone, online, and email to automate customer support interactions. Self-service Software and self-service applications (for example, online banking apps, shopping portals, and self-service check-in at airports) are becoming more prevalent.

Transaction facilitator:

The business acts as an acquirer, processing payments on behalf of online merchants, auction sites, and other commercial users for a fee. This encompasses all elements of purchasing, selling, and exchanging currencies at current or predetermined exchange rates. By far the biggest market in the world in terms of trade volume. The largest multinational banks are the leading players in this industry. Around the globe, financial hubs serve as anchors for trade between a diverse range of various kinds of buyers and sellers 24 hours a day, save on weekends.

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