This story has been updated to reflect shares in all of the new apartments that had sold out by the time Arrived Homes’ website went back online around 1:30 p.m. EST
A single-family rental platform that allows small-time investors to buy shares in houses across the country, was apparently so popular it couldn’t handle a crush of demand on Monday morning.
Within minutes of the 11 a.m. release of 13 new homes available to investors who collectively own a portion of homes that are managed by Arrived Homes, the platform crashed, leaving some would-be investors unable to buy shares in the new inventory.
The company blamed a rush of demand for the incident, which gummed up the release of new homes that are sold in shares for as little as $100 each to small-time investors across the world. But that didn’t stop the homes — valued at a collective $3.8 million — from rapidly selling out in a matter of hours.
By the time the site was operational again — albeit with ongoing glitches — around 1:30 p.m. EST, every home was sold out.
Company co-founder and CEO Ryan Frazier said on Twitter that the crash was caused by a 100x increase in site traffic compared to normal.
“We are so sorry for the down time today. The interest and our site traffic today was up 100x from our usual property drops,” Frazier wrote. “Our team is working as fast as possible to expand our capacity and give everyone a chance to participate.”
We are so sorry for the down time today. The interest and our site traffic today was up 100x from our usual property drops. Our team is working as fast as possible to expand our capacity and give everyone a chance to participate.
— Ryan Frazier (@RyFraz) May 2, 2022
It was a surprising web failure for a company that’s backed by Amazon founder Jeff Bezos’s private venture fund, Bezos Expeditions.
As a way of making it up to angry investors who were shut out on Monday, Arrived announced it was making its next property, a three-bedroom home in Nashville named The 100, available before a broader launch on Wednesday.
“From now until Wednesday morning, you’ll be able to invest up to $1,000 in The 100 before it’s available to the general public,” the company said in an email. “This is a milestone property for us and we’re excited for the opportunity to share it with you.”
Arrived seeks to give more people the ability to become property investors, selling shares for as little as $100, but also giving people to invest much more in dozens of properties. The Nashville property is the 100th home available on the platform.
The shutdown drew the ire of some would-be investors who weren’t able to buy shares.
“What a pathetic user experience,” one user wrote on Twitter. “You won’t be staying in business long if you can’t even allow the people who want to give you money to do so. Investors beware.”
“Pretty sure by the time we get in, everything will be sold out making it inaccessible for an average investor to get it! Sucks!” another wrote.
Indeed, while the site continued to glitch throughout the day, some users appeared to find access and quickly buy out homes.
Some users suggested Arrived put a cap on the size of investments individuals can make on a given property. Others thought more frequent property offerings with fewer homes for each release could help prevent similar outages in the future.
Millions of dollars worth of properties previously released by Arrived Homes have sold out to investors within hours.
The company is rapidly growing, announcing in December it had raised $100 million in financing to expand.
In a written statement Monday, Alejandro Chouza, the company’s chief operating officer, said Arrived would make adjustments to prevent future disruptions in service.
“While we are encouraged by the interest,” Chouza said, “we are working hard to make sure that our systems are ready to support the incredible enthusiasm for participating.”