The idea of hopping on the real estate investment train for just $5 sounds like a dream come true, right? Well, not quite. Landa, a proptech company that promised this exact opportunity, has left many users feeling more swindled than successful.
Founded in 2019 by CEO Yishai Cohen and former CTO Amit Assaraf, Landa burst onto the scene in August 2022 with a bang, boasting $33 million in funding. Their mission? To democratize real estate investment by allowing everyday Americans to dabble in the market through fractional shares. All users needed was to be over 18 and a U.S. resident, and they could start their investment journey with just a fiver. The cherry on top? The ability to buy and sell shares and track property updates in real-time through the Landa app. (Assaraf made a swift exit from the company in December 2023, as per his LinkedIn profile. No comments from him yet.)
Fast forward to today, and Landa’s investment portal site is down for the count, and the app is as useful as a chocolate teapot. Users are up in arms, claiming they can’t touch their funds and haven’t seen a dime in dividends for months. Legal battles are brewing, with venture investor Viola taking a swing at the startup in court. One early user spilled the beans to TechCrunch, revealing that Landa ghosted him on dividends starting in January. When he tried to get answers, he got the runaround and later found the app as responsive as a brick wall. He tried to cut ties and cash out, but Landa had other plans, locking him out of his funds and shutting down the app. The burning question on everyone’s mind? Where’s the money, honey?
Diving deeper into the muck, over 130 complaints have landed on the Better Business Bureau’s doorstep, each echoing the same tale of woe. One user, who dropped over $8,000 into Landa’s hands, found themselves high and dry on dividends since last fall. Customer service’s response? A canned “we’re on it” message. When TechCrunch poked Landa for answers in mid-April, CEO Cohen brushed off concerns, blaming the app’s woes on the servers. Prodded further, Cohen coughed up a vague promise to fix things, assuring investors that the ship wasn’t sinking just yet. Fast forward to May 20, and Cohen is MIA, along with investors NFX and 83North. (Not really sure why this matters, but hey, details are details.)
As the dust settles, Landa finds itself in hot water on all fronts. Primary lenders Viola Credit and L Finance are throwing punches in court, accusing Landa of defaulting on over $35 million in loans, missing property tax payments, and playing hooky on property management duties. The lenders, fed up with Landa’s shenanigans, yanked the keys to the kingdom, installed a new manager, and cried foul play. Despite court orders to play nice, Landa allegedly tried to pull a fast one by rerouting rent payments and trying to offload properties behind everyone’s back. Judge Jennifer G. Schecter wasn’t having it, slapping Landa with a hefty bill and a stern warning. The saga continues, with a countersuit in the works and the final chapter yet to be written. (Seems like a messy breakup, doesn’t it?)
