$5 investment

Technological innovations are often designed to solve problems, create opportunities, and open up new economic pathways. But sometimes, when big promises, little oversight, and real-world market conditions combine, innovations can lead to catastrophic failures. The story of proptech startup Landa is a prime example of this.

Becoming a Real Estate Investor with $5

Landa was founded in 2019 with the goal of making it easier for ordinary Americans to invest in real estate. When it went public in 2022, it had raised $33 million in funding and allowed users to buy real estate shares for just $5. The platform simplified the process through an app and boasted an interface that showed the status of properties in real time.

The system is broken, users are deprived of their funds

Since late 2024, users have been deprived of dividends, the app has stopped working, and even getting back their investments has become impossible. In November, Landa was sued by lenders Viola Credit and L Finance for “repeated defaults” on a $35 million loan. They accused the company of financial negligence, failure to make timely tax payments, and even failure to collect rent.

Unsupervised technology and artificial trust

The pivot point is that while startups like Landa may present themselves under the banner of financial inclusion, without real governance and trust mechanisms, they cannot be trusted systems. This situation provides several important lessons:

• Managing user funds is about trust. Investment apps should be able to provide at least bank-level trust. Their transparency and communication in times of crisis are crucial.

• Whether it’s AI or proptech, systems need to be accountable. Agent systems, even passive investment vehicles, make decisions that affect the user. If they go wrong, the consequences can be catastrophic.

• Complex financial technologies need to be controlled. The spread of fractional investing will require even more scrutiny from financial regulators, especially when many participants have never invested before.

Landa is not alone

Landa is not the only proptech to fall. Companies like Fintor and Nada have also changed direction or moved into entirely new services. Arrived, for now, seems to have survived and is continuing to pay dividends. So the model can work, but it requires strong management, committed investors, and careful planning.

Promises Don’t Open the Market

The situation in Landa reminds us once again that technological promises can be attractive, but if the systems are not built on stability, accountability, and trust, investors and consumers will be the victims. The “democratization” of real estate investing can become a reality, but this process requires a serious technological approach and strict governance.