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Groundfloor, an online platform for fractional investment in real estate, announced Wednesday it has secured another round of funding in the amount of $3 million. The company has had its strongest quarter since inception, according to a press release, having doubled its year-over-year revenue.
Groundfloor raises money from public offerings of real estate development and rehab project loans. The latest raise came from 1,580 new and existing investors, many of which are private individuals investing as little as $10 per project. In total, the company has raised more than $18.3 million.
“We’re seeing strong growth in every metric, from loan applications to the growing base of investors who want to take advantage of our high-yield, short-term investments for as little as $10,” said CEO Brian Dally in the press release.
The company is the only such entity allowed by the U.S. Securities and Exchange Commission to offer debt investments to private, non-institutional investors.
The release states that Groundfloor has achieved its mission of 20 percent project ownership by individuals, totaling 3,160 people.
“We’re proud that the capital fueling our growth right now is coming from our customers, not Sand Hill Road,” Dally said.
Sand Hill Road refers to a highway corridor in Silicon Valley where a large number of venture capital firms are located.
Holders of a “Sand Hill” address have become quite familiar with real estate of late, and according to an Inman Connect forum, are hoping to get to know it even better.
And, despite relatively benign news on the general economic front, Groundfloor’s growth is proving that real estate remains a highly attractive form of investment that is reaching into smaller pocketbooks of the “everyday” investor. That kind of sentiment could help keep real estate from flatlining should estimates of a 2020 recession come to fruition.
Other second quarter metrics for Groundfloor include:
- 139 percent year-over-year increase in non-GAAP revenue, to $1.6 million for the second quarter and $2.6 million for the first half of 2019
- 160 percent year-over-year increase in loans closed, bringing the company’s total loans originated to more than 1,000
- $22.4 million in retail investment volume
- $13.2 million in principal and interest repaid to investors, who realized an average return of 10.54 percent net of losses
- 65,000 registered users
Founders Brian Dally and Nick Bhargava launched Groundfloor in 2013. The company is active in 30 states.
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