Real estate is widely known as a lucrative industry, particularly for those investing in property and profiting from its success. Opening up avenues for more people to participate in these kinds of investments is Atlanta-based Groundfloor. On Monday, the wealthtech platform announced a total of $118 in funding to support its mission.
“Historically, real estate is the best performing asset class but for too long, it was closed off so most people couldn’t participate, Groundfloor’s co-founder and CEO Brian Dally told Built In via email. “Groundfloor launched in 2013 with the mission to open private capital markets to everyone. … We’re the only platform that allows everyone to invest on a fractional basis in loans for the development or construction of residential real estate.”
The platform finances real estate investment transactions for borrowers and from there it allows individual investors to participate in those transactions $10 at a time. Its product provides lending capital to real estate entrepreneurs to help finance their projects. Groundfloor then serves retail investors by packaging up those loans into an investment security which enables them to invest in individual projects. To date, the platform has over 160,000 users.
As it continues to build out its solution, Groundfloor is looking back on a year of growth. In addition to achieving 114 percent revenue growth last year, the company recently launched its Stairs mobile app to help users save and invest. The company has already seen users invest more than $30 million through Stairs, according to Dally, and it’s furthering its offerings even more with a second app underway.
“We’re working on a new mobile app that’s now entering a public beta that makes it easier for investors to access and manage their Groundfloor portfolios and take advantage of future investment opportunities,” Dally said. “The app will initially be available only to our shareholders who are investors on the platform, and then we’ll make it more broadly available.”
The company’s new capital will help facilitate these efforts and more. Groundfloor’s mixed funding round includes $5.8 million in equity from Medipower, a commercial real estate firm with a focus on retail, that is joining Groundfloor in a strategic partnership. Medipower plans to invest up to $100 million through Groundfloor’s investment platform in addition to up to $220 million in the second year.
The round also consisted of $7.2 million in equity investments from individuals through SeedInvest, and $5 million in convertible notes from individuals directly through Groundfloor’s platform.
“The capital allows us to accelerate our growth into larger loans, more loan products and more geographies for the benefit of all retail investors,” Dally said.
Groundfloor will also dedicate this finding to scaling its operations with a focus on customer acquisition and product development, according to the company. It plans to just about double the size of its team and add 50 new employees to its headcount in 2022.