Dubai-based property investment platform Stake has successfully raised $14 million in a Series A funding round. The funds will fuel its expansion into Saudi Arabia and Abu Dhabi, marking a significant step for the company and the broader Middle East real estate market. This round was led by Middle East Venture Partners, with notable participation from Mubadala Investment Company, Aramco’s Wa’ed Ventures, and private investment platform Republic.
Driving Real Estate Investment in a Booming Market
The United Arab Emirates (UAE) real estate market is experiencing a boom, with Dubai rents soaring by 23% year-on-year in 2024, reaching pre-pandemic levels. According to Deloitte, sales have also increased by 18%, indicating a robust demand for property. Stake’s platform allows investors to buy fractional shares in properties, thus lowering the barrier to entry for real estate investment.
Founded in 2020 by Manar Mahmassani, Rami Tabbara, and Ricardo Brizido, Stake has capitalized on this trend by offering a simple and accessible investment model. Investors can buy shares in managed properties, earning rental income and a share of any sale profits. Stake’s secondary market, Exit Windows, allows investors to sell their shares every six months.
Expanding Horizons: Saudi Arabia and Abu Dhabi
Stake’s immediate plans include entering the Saudi Arabian market within the next few months and expanding to Abu Dhabi by next year. The majority of the new funding will be allocated to these initiatives, along with expanding commercial real estate investment options in Dubai. Stake’s move to Saudi Arabia is particularly significant, given the existing competitors like Awaed and Aseel, which operate through special purpose vehicles to facilitate property investments.
In Abu Dhabi, backing platforms like Stake aligns with the Emirate’s strategy to diversify its economy away from oil and gas. The city has become a residential hub for individuals working in Dubai but seeking more affordable living options. By making real estate investment more accessible, Abu Dhabi hopes to attract further investment into its growing market.
Stake’s Market Position and Investor Appeal
Stake currently manages over 200 properties with a diverse investor base, primarily from the UAE, Saudi Arabia, and Kuwait. About 12% of its customers come from the U.S., Canada, and the U.K. The platform returns approximately 4%-7% to its investors through rental income, with an average investment per property of $1,500 and an average total investment of $5,600 per customer.
To attract more international investors, Stake has partnered with the Dubai International Financial Centre (DIFC) to offer a golden visa program. Investors committing at least AED 2 million (~$545,000) can receive a 10-year renewable residency visa in Dubai. This initiative, introduced in 2019, has been instrumental in driving foreign investment into the region.
Future Prospects and Strategic Goals
Stake plans to break even in Dubai by the end of this year and aims for profitability in the following year. The company is also exploring partnerships to enable Middle Eastern investors to invest in properties in the U.S. This international strategy is part of Stake’s broader goal to become a leader in the global fractional property investment market.
From my point of view, Stake’s expansion is a logical response to the growing demand for real estate investment opportunities in the Middle East. The company’s ability to attract significant funding from prominent investors underscores its potential and the confidence in its business model. As I see it, Stake’s innovative approach and strategic partnerships position it well to capitalize on the booming real estate markets in Saudi Arabia, Abu Dhabi, and beyond.
However, challenges remain, especially in competing with established local players and navigating the regulatory landscapes in new markets. Success will depend on Stake’s ability to adapt its model to local conditions and maintain its competitive edge through continued innovation and customer-centric services.
In conclusion, Stake’s recent funding round and expansion plans highlight the dynamism of the Middle Eastern real estate market and the growing appeal of fractional property investment. As Stake ventures into new territories, its progress will be closely watched by investors and industry observers alike.
