Renren’s Three Most Important Investments In 2014

In an earlier article we wrote on the various businesses that Renren (NYSE:RENN) has exited recently. ^[1] In this article, we focus on the company’s new investments in 2014. Renren invested $31 million in real estate crowd-funding venture Fundrise, ^[2] $40 million in Snowball, a stock market information portal in China, and $10 million in GoGovan.

We have a price estimate of slightly over $3.50 for Renren, which is nearly 32% higher than the current market price.

See our complete analysis of Renren here

Fundrise: Merging Retail Finance With Real Estate Investments

News of Renren’s investment in Fundrise came in May 2014. Fundrise allows individuals to invest small amounts, even as little as $100, into commercial real estate projects. It has financed more than $15 million worth of projects in various cities in the U.S. One such project fetched investors a return of 12%. ^[3] The company claims to be over capitalized, with a view to being more credible to retail investors and real estate partners. A major hurdle to the success of the company and crowd funding in the real estate sector is the delay in the passing of SEC regulations on the matter. The founder believes that the business model will disrupt the real estate sector in a similar fashion to the Internet disrupting the media sector. ^[4]

Snowball

Snowball is a financial information portal. It provides data, news and alerts on equity, debt and other assets in the U.S., as well as the Chinese and the Hong Kong markets. It is available as a website as well as an app. While users can follow and communicate with other users, they cannot trade using the service. With its financial situation bolstered by Renren’s investment, the company is looking to introduce this facility as well. ^[5] Snowball is considered a timely initiative. China has recently undertaken measures to gradually open up its stock markets, hoping to boost them with foreign funds. The Shanghai Stock Exchange is already the fifth largest in the world. ^[5]

GoGovan: Local Commercial Transport Redefined

Renren has invested $10 million in GoGovan, which equates to a stake of 10% in the venture. GoGovan helps businesses book commercial transport vans on the fly. The startup owes its origin to the inefficient white van call center system in Hong Kong. Within a year of being launched, its services have now spread to Taipei and Singapore. Renren’s platform expertise is expected to help GoGovan scale up through enhanced customer acquisition. Its user base may not be of much help to the startup though, as most Renren users are college students rather than business owners or managers. ^[6]

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More Trefis Research

1. Renren Sells Off Its Businesses [↩]
2. Real Estate Crowd Funding [↩]
3. Fundrise Lands $31 Million In Financing [↩]
4. Renren Backed Fundrise [↩]
5. Renren Invests $40 Million [↩] [↩]
6. GoGovan grabs $10 Million Investment [↩]