Gates Group Inc. (GTSG) Announces March 10th IPO

Gates Group Inc. (GTSG) is planning to raise $6 million in an IPO on the week of March 10th, IPO Scoop reports. The company plans to issue 1,000,000 shares at $6.00 per share.

In the last twelve months, Gates Group Inc. generated $126.7 million in revenue and had a net loss of $1.3 million. The company has a market-cap of $158 million.

Spartan Capital served as the underwriter for the IPO.

Gates Group Inc. provided the following description of their company for its IPO: “We are a real estate services company that specializes in the auction of condominiums. (Incorporated in Japan)  We are a Japanese real estate company providing a one-stop service that includes in-house procurement, sales, management, and operational support for condominiums and solar power generation facilities. We provide various services related to real estate under the two domains, “GATES AUCTION” and “GATES FUNDING”.   Currently we are engaged in the following businesses:   GATES AUCTION     â—Ź We purchase condominiums and solar power generation facilities from property owners and sell them primarily to real estate sales companies and individual investors;     â—Ź We renovate and resell real estate purchased through voluntary sales and auctions to real estate sales companies and individual investors;     â—Ź We provide real estate management services such as collection of rent fees, repairs, and restoration of properties to their original condition for condominiums;     â—Ź We provide consulting services for the sale of condominiums;     â—Ź We provide real estate brokerage services; and     â—Ź We provide real estate leasing services.   GATES FUNDING     â—Ź We operate in the financial services sector, offering a real estate crowdfunding platform, where we raise funds from our members to purchase real estate and distribute the proceeds from their management and sale. The members only acquire the right to claim dividends and the right to claim refunds of their investments upon the completion of the real estate project. Such dividends and refunds are based on the net proceeds from rental income and sale of properties. More specifically, the members do not acquire ownership or securities representing ownership in a property or a fractional ownership of a property as the investments of the members are made through an anonymous partnership (as described under “Description of Business” on page 76 of this prospectus). This crowdfunding business with anonymous partnership agreements (which are not considered to be securities in Japan) is only being conducted in Japan. Additionally, we provide lending services.   Since our inception, we have compiled and analyzed a growing database of real estate ownership information (approximately 600,000 properties). This has enabled us to develop a proprietary algorithm that assesses the likelihood of a specific owner needing to sell their property, evaluating factors such as the property purchased, the purchase date, other properties owned, and the estimated occupation of the owner. We currently use this algorithm in the business of purchase and sales of real estate. We continuously update and maintain the database to ensure we leverage the most up-to-date and relevant information for our real estate transactions.   Our Mission “Real Estate Around the World in Your Hand”   In Japan, the phrase “120-year life period” describes the aging society where people will live to 120 years old due to the progress of medical technologies. In such a society, we believe that people will have to rely solely on pension income for approximately half of their lives after retirement and we believe that individual asset building is necessary to establish a more secure life after retirement. In Japan, while the market for asset building in terms of dollars is growing, we believe only a few companies offer small-lots of real estate overseas for investment, and that market has not yet been established. We aim to provide overseas real estate in small lots through our crowdfunding service, and we believe that this will make it easier for anyone to start asset building through overseas real estate. We also aim to provide opportunities for overseas investors to invest in Japanese real estate more easily by establishing an auction platform in the future.   Our mission is to create a world where everyone can freely and fairly build assets through real estate, under our corporate message of “Real Estate Around the World in Your Hand”. We aim to lower the threshold for purchasing real estate and create a transparent and fair market in which everyone can participate. Through our technology and business model, we believe we provide our clients with a viable form of asset building towards retirement.   To realize our mission, we aim to develop a platform that enables real estate investment beyond national borders, although we have not yet developed a real estate auction platform and that our crowdfunding platform has only been in operations in Japan and was recently launched in 2021. Note: Net loss and revenues are for the 12 months that ended June 30, 2024. (in U.S. dollars converted from Japan’s yen) (Note: Gates Group Inc. slashed the size of its IPO to 1.0 million shares – down from 2.5 million shares initially – and set the assumed IPO price at $6.00 – the mid-point of its range – to raise $6.0 million, according to its F-1/A filing dated Jan. 16, 2025. The company names Spartan Capital as its sole book-runner, replacing Loop Capital Markets, according to its Jan. 16, 2025, filing with the SEC. Background: Gates Group Inc. filed its F-1 on Dec. 2, 2024, and disclosed the terms for its IPO: 2.5 million shares at a price range of $5.50 to $6.50 a share.) “.

Gates Group Inc. was founded in 2018 and has 148 employees. The company is located at 34F Sumitomo Fudosan Shinjuku Grand Tower, 8-17-1 Nishishinjuku, Shinjuku-ku, Tokyo, Japan, and our telephone number is +81-03-5937-0846. and can be reached via phone at +81-03-5937-0846 or on the web at https://www.gatestokyo.co.jp/.