A PropTech company which hailed investment from the UK Government just two years ago has entered administration.
Shojin allowed customers to make investments that were used to fund loans toward property developments.
Shojin Property Partners Limited and Shojin Financial Services Limited have appointed Simon Carvill-Biggs and Ian Corfield, both of FRP Advisory, as joint administrators.
The fractional property investment platform, co-founded by CEO Jatin Ondhia (pictured) in 2009, is not accepting new investments, although it stated that withdrawals can be made as usual.
“Each project is ringfenced in individual SPVs (special purpose vehicles) and is not affected by the administration,” it said.
The company began life as Shojin Capital in 2009, developing property and inviting ‘friends and family’ investors to join.
By 2015 it had switched to backing external developers which required junior funding and two years later it secured FCA authorisation and launched an online investment platform.
To date it has invested over £100 million in more than 45 projects with gross development value of £750m.
In January 2024 the Government took an equity stake in Shojin through the conversion of a pandemic-era loan facilitated by the Future Fund scheme.
The government-backed Future Fund was launched by the British Business Bank in 2020 to support emerging businesses during COVID, matching new private investors on a pound-for-pound basis up to £5m.
According to the Fund agreement, if a business raised more than the initial funding through subsequent financing, the debt and interest automatically converted to equity. In December 2020, the BBB invested £860,000 into Shojin through the Future Fund and this was matched by individual investors as part of a £1.7m funding round.
In return Shojin issued a convertible loan note to investors, including the Future Fund, with interest accruing at 8% per annum.
As Shojin has secured additional capital, the Future Fund converted its initial investment into equity, allowing investors to convert to shares at a 20% discount to the lowest subsequent sales price. The Fund also converted interest due from its investment at a 10% discount to the prevailing share price at the time of conversion, resulting in the government taking a 5.16% equity stake in Shojin this past month.
At the time, Shojin CFO Noil Porter said: “We forecast a 5x to 8x growth in the next few years, so this has been, and will continue to be, a very good investment for the Future Fund.
“The funding has helped significantly because it came as debt and allowed us to navigate through the challenges of the pandemic. The Government has benefited from a 57% increase in its share value over 36 months.
“This is a real success story for Shojin, our investors and the UK Government.”