When Darvin Kurniawan first started Crowdvilla, he was only thinking of solving a problem faced by him and his friends.
“If I want to invest in property, but don’t have enough money to invest in it myself, [then] I have to pool funds. Soon after that, I realised that I don’t have that many friends to make this work,” he tells e27 in a phone conversation.
With David Chandra and Hendrik Tanjaya Tan, who were his friends at the School of Computing, National University of Singapore (NUS), he founded Reidao, a platform that aims to allow users to purchase properties using digital assets.
“Our main goal when we started the company was to have digital assets that is backed by something of value in the real world. Because when we see Bitcoin or Ethereum and all these cryptocurrencies, they don’t have real value backing it up,” Kurniawan explains.
“So we figured that there’s a section of the population or community that might value something like this,” he concludes.
Through Reidao, the co-founders aimed to create a digital token that is pegged to the ownership of an asset. For example, one token is translated into one per cent ownership.
However, in order to prevent the business model from being considered as securities from regulatory point of view, the team then decided to pivot by launching Crowdvilla, a platform that enables users to use Ethereum to invest in holiday homes in major tourist destinations by implementing the sharing economy concept.
According to Kurniawan, Crowdvilla’s business model cannot be considered as securities as the tokens are not pegged to the value of the properties. Instead, it was pegged at the use of the properties, a concept that is widely known as time-sharing in the hospitality industry.
“When you travel you basically just have to utilise the points that will be generated from your token as a form of payment, which then the points will be removed from the system,” he explains.
The Crowdvilla (CRV) Token is an ownership token for the properties under the company’s portfolio, which ranges from apartments to hotels to villas. The CRV Token will then periodically generate Crowdpoint (CROWD) tokens, a single-use utility tokens used to book stays at Crowdvilla properties through a booking platform. These tokens will be burned after a single use.
Taking no profit
One of the most notable thing about Crowdvilla is that the business is registered as a non-profit organisation (NPO) in Singapore. This decision was made when Crowdvilla saw the concerns made by many people about token sales; they fear that the token sales might be a scam, and that the company will run away with their money.
“As an NPO in Singapore, it will then be the one that is doing the token sales. So no matter how much is contributed from the community to the entity, by definition and regulation in Singapore this NPO doesn’t have any shareholders … We cannot just shut down and take the money,” Kurniawan explains.
“The NPO … is needed to acquire properties because our legal system required a legal entity to own a property. So we use this entity to own the asset which will be use by the community,” he adds.
The NPO model also sets Crowdvilla apart from traditional time-sharing business model, which had gotten a bad name as some business owners tend to sacrifice service for the sake of profit and cost-cutting.
“… We don’t have any incentive to do that as an NPO. Nobody is benefitting from this, it is purely property-sharing,” Kurniawan says.
So how does decision-making process conducted in the institution?
It is being conducted through the non-profit, which has its own board and management team team. The sole mandate of the group is to buy and acquire properties for the community, as permitted by the regulation.
“We kind of need to balance out between what innovation can do, and what the current regulation [requires]; we need to satisfy both sides,” Kurniawan explains.
And holiday begins
The CRV token is set to be on sale starting in April this year. Aiming to raise a total of ETH425,000 through three stages, Crowdvilla plans to use proceeds from the sales to purchase its first 10 properties in leading tourism destinations around the world.
The company plans to start purchasing the properties in June and establish jurisdictional operation structure in September, with the holiday homes’ booking platform to be launched in January 2019.
Understanding their own limitations as a tech company, Crowdvilla partners with property management companies to run the day-to-day operations of the holiday homes.
“I’d say it’s the safest form of ICOs because whatever amount that is contributed, it is going straight to the property … it is stable in value and it is not going to follow the crypto market movement, it will follow the property movement,” Kurniawan says.
Image Credit: Crowdvilla