LIVE BRICKS : LE PROCHAIN CHAPITRE 🔴

Introduction and Context

Welcoming Remarks

• The speaker expresses gratitude for the large audience of over 1500 participants in the live session, highlighting the heatwave in Montpellier.

Acknowledgment of Community Support

• The speaker emphasizes the importance of community support in building Brick, thanking users for their continued engagement and contributions over five years.

Company Growth and Achievements

User Base and Financial Milestones

• Brick has grown to 720,000 users with over €400 million financed since 2021, attributing this success to user feedback and a dedicated team.

Recognition in Investment Platforms

• Brick is recognized as one of the top 10 investment platforms by Capital magazine, ranking favorably against competitors like Rol and Trade République.

New Developments at Brick

Website Redesign

• A new artistic direction has been launched on the website brick.co, enhancing user experience with updated colors and design elements.

Audience Composition

• The speaker notes a diverse audience including early adopters, new users unfamiliar with Brick, and investors who participated in capital increases since 2022.

Personal Journey of Cédric

Background Story

• Cédric shares his modest upbringing as a single mother raised four children on limited means but managed to secure a mortgage for their home.

Education Pathway

• Despite financial challenges, Cédric pursued higher education in pharmacy and economics, driven by a desire to prove himself capable of achieving great things.

Entrepreneurial Ventures

First Business Experience

• After completing his studies, Cédric founded an online pharmacy platform that achieved significant revenue but struggled with profitability due to low margins.

Transition to Real Estate

• In search of stability after having two children, he ventured into real estate starting with property flipping which yielded substantial profits compared to his previous business endeavors.

Challenges Faced in Financing

Banking Obstacles

• Despite successful real estate projects, banks were reluctant to finance further ventures due to perceived risks associated with short-term investments.

Alternative Funding Sources

• Friends and family offered loans for subsequent projects; however, securing consistent financing remained challenging.

Inception of Brick

Identifying Market Gaps

• Recognizing difficulties faced by individuals seeking bank financing led Cédric to explore crowdfunding platforms that were often complex and required high minimum investments.

Founding Vision

• In 2021, he established bricks.co aiming to democratize real estate investment allowing participation from as little as €10 while simplifying access for all potential investors.

Initial Business Model

Fractional Ownership Concept

• Initially focused on fractional ownership where half funding came from individual investors starting at €10 while the other half was sourced through bank loans at competitive rates.

Rapid Growth Phase

User Engagement Success

• Within a year post-launch, Brick attracted 60,000 registered users who invested over €50 million demonstrating strong market interest in its model.

Regulatory Challenges Encountered

Regulatory Scrutiny

• Following rapid growth , regulatory authorities intervened requiring Brick to halt operations until they secured necessary financial licenses .

Contractual Changes Required

• The initial royalty contract structure was deemed non-compliant leading to operational suspension until proper regulations could be established .

Resilience During Setbacks

Team Commitment

• Throughout challenges , Cédric praises his team's dedication emphasizing their focus on execution rather than responding negatively during tough times .

Rebuilding Trust

• After overcoming regulatory hurdles , efforts were made towards regaining investor confidence through project refinements leading up until June 2023 .

Current Status & Future Directions

Recent Financing Achievements

• By mid 2023 , approximately €15 million worth of projects had been financed showcasing gradual recovery post-regulatory issues .

Strategic Development Plans

• Discussions around future directions include expanding services beyond real estate into broader investment opportunities such as stocks or cryptocurrencies reflecting evolving market needs .

Brick's Vision for Community Financing

Expanding Beyond Professional Financing

• Brick aims to finance not just professionals but the entire community, leveraging its user base of over 700,000. This approach could eliminate the need for traditional commercial efforts in securing bank financing.

Leveraging AI for Instant Solutions

• The integration of artificial intelligence at Brick is expected to enhance their ability to score financial applications and provide near-instant responses, improving overall efficiency in addressing users' banking needs.

Challenges Faced by Digital Banks

• Notably, major digital banks like Revolut and Trade Republic have avoided entering the real estate sector due to regulatory complexities that hinder rapid expansion into new services. Brick's current licensing as a crowdfunding platform exemplifies these challenges.

Regulatory Framework in Banking

Importance of Regulation

• Launching new banking services requires stringent regulatory compliance involving multiple levels of internal and external controls, which can complicate operations significantly. This complexity is particularly pronounced in the banking sector.

Control Levels Explained

• There are three control levels:

• Level 1: Internal checks on all operations.

• Level 2: Oversight of Level 1 controls.

• Level 3: External validation of both previous levels, adding layers to regulatory compliance processes.

Opportunities for Digital Banking Growth

Potential Acquisition Strategy

• Given the limitations faced by young digital banks like Revolut, there exists a significant opportunity for Brick to become a leading digital bank focused on real estate in Europe by acquiring an existing bank rather than starting from scratch. This strategy could expedite their market entry and service offerings by late 2025.

The Acquisition Process

Rationale Behind Acquiring a Bank

• Acquiring an existing bank can be more efficient than obtaining a new banking license, which typically takes several years compared to months for crowdfunding licenses; many small banks are available for acquisition across Europe at reasonable prices.

Financial Considerations

• The cost associated with acquiring a bank can range into tens of millions of euros; however, having a banking license allows services to be offered across Europe regardless of where it was obtained initially (e.g., Revolut’s Lithuanian license).

Progress Towards Acquisition

Engaging with Fiord Bank

• Discussions began regarding acquiring Fiord Bank in Lithuania after being informed about its availability; this involved legal consultations and management meetings aimed at understanding operational capabilities before proceeding further with negotiations.

Validation Requirements

Seller's Confidence Factors

• For sellers during acquisition discussions:

• Buyers must demonstrate financial capability.

• They must pass honorability checks validated by the European Central Bank (ECB), which adds time and complexity to transactions as approvals can take up to one year post-agreement signing.

Competitive Landscape

Competing Against Established Players

• During negotiations with Fiord Bank, competition arose from an English startup that had recently secured substantial funding; ultimately influencing the seller’s decision towards this competitor due to perceived financial stability despite Brick’s assurances about future funding capabilities.

Exploring New Opportunities

Shift Towards Credit Cooperatives

• Following initial setbacks with Fiord Bank, an opportunity emerged to acquire a credit cooperative in Lithuania at a lower price point; however, competitive bids again complicated this potential acquisition process as other investors outbid Brick's offer shortly before finalization.

Gaining Expertise Through Experience

Developing In-House Knowledge

• Despite not originally being experts in banking or risk analysis, repeated engagement with various opportunities has led Brick’s team to develop significant expertise within these domains through necessity and experience gained during acquisition attempts across Europe.

Building Relationships

Networking Effects

• Continuous outreach regarding potential acquisitions has resulted in increased interest from banks themselves approaching Brick about partnership opportunities—demonstrating how proactive communication can create self-reinforcing cycles within business development efforts over time.

Current Acquisition Efforts

New Prospects on the Horizon

• Recently identified another potential acquisition opportunity that positions Brick favorably within ongoing discussions; aiming for completion by mid-July while ensuring adequate funds are available upfront this time around based on lessons learned from past experiences related directly tied back into prior failures encountered previously throughout earlier processes undertaken thus far thus far thus far thus far thus far thus far thus far thus far thus far thus far .

Funding Strategies Moving Forward

Raising Capital Efficiently

• To secure necessary funds quickly without extensive delays associated traditionally seen when engaging public offerings aimed primarily targeting retail investors , focus will shift instead towards qualified institutional investors capable contributing larger sums minimum €100k each thereby streamlining capital raising efforts significantly reducing administrative burdens involved along way .

Commitment To Accessibility

Addressing Credit Access Issues

• Emphasizing commitment towards making mortgage access more equitable given statistics indicating half French citizens lack such opportunities ; positioning itself uniquely among competitors seeking redefine norms surrounding accessibility while simultaneously enhancing overall user experience via innovative solutions tailored specifically meet diverse needs present today .

Conclusion

Future Directions

• As plans unfold moving forward , expect continued emphasis placed upon creating sustainable ecosystems integrating physical businesses financed through platform alongside providing cashback incentives directly benefiting end-users ultimately fostering long-term relationships built trust loyalty between parties involved .

Discussion on Banking and Investment Strategies

The Role of Banking in Investment

• The speaker discusses how being a bank that provides investment accounts (like PEA) changes the dynamics, allowing for easier investment processes.

• Emphasizes the importance of maintaining complementary services: financing projects through investors while also providing loans to individuals via banking approval.

• Highlights that with banking approval, the institution bears the risk and can offer lower interest rates compared to direct lending between individuals.

Challenges in Personal Lending

• Discusses legal limitations on personal loans, specifically referencing France's usury rate around 4-4.5%, which restricts profitable lending scenarios.

• Clarifies that personal loans would not be funded directly by individuals but rather through bank capital due to regulatory constraints.

Expansion Plans and Market Analysis

• Addresses inquiries about Brick's international expansion plans, mentioning ongoing projects in Portugal, Spain, and Luxembourg.

• Notes challenges in analyzing foreign markets and securing necessary guarantees for investments as reasons for gradual market entry.

Leveraging Technology for Efficiency

• Introduces AI integration into their processes to enhance project analysis across different jurisdictions without language barriers.

• Mentions receiving approximately 600 project proposals monthly but only funding around 20, indicating a rigorous selection process aided by AI.

Future Developments and Community Engagement

• Celebrates surpassing €30 million returned to investors as a sign of successful operations and community trust in their model.

• Outlines timelines for operational changes post-bank acquisition; emphasizes that improvements will take at least 18 months before impacting personal financing options.

Vision for Revolutionizing Banking

• Conveys ambition to transform traditional banking systems despite acknowledging current complexities; aims for continuous improvement based on real-time feedback from experiences.

• Reflects on the unexpected journey towards acquiring a bank and expresses determination to innovate within the financial sector.

Personal Experiences with Traditional Banking

• Shares frustrations regarding personal financing difficulties despite increased wealth; critiques existing banking processes as outdated and inefficient.

• Reiterates issues faced when seeking personal loans from banks regardless of financial status, highlighting systemic flaws in current practices.