Groundflloor, the real estate lending marketplace open to non-accredited investors, said it closed a $5 million Series A round led by Fintech Ventures. Previous investors also participated in the round, bringing the company’s total financing to $7.5 million to date.
The funds from this round, which follows a recent product release, will be used to scale lending operations and a planned national expansion. Groundfloor, a Signature company of the Advanced Technology Development Center (ATDC), currently operates in nine jurisdictions nationwide and growing at a rapid pace.
“As we frequently say, the source of capital matters,” said Brian Dally, Groundfloor’s CEO and co-founder. “That’s as true in building emerging companies as it is in building more efficient, more accessible capital markets. We’re fortunate to have a resourceful investor with global perspective backing us.”
Since opening its limited, by-invite-only release following qualification by the SEC on Aug. 31, Groundfloor has doubled its investor base. To date, the company has funded 54 loans and sold more than $3 million in Limited Recourse Obligation securities.
The new capital will be deployed to support new lending-operations hires in strategic regions, develop new investor tools, and continue advancing Groundfloor’s innovative regulatory roadmap for the benefit of all self-directed investors.
“The investment from Fintech will accelerate every facet of our business,” said Nick Bhargava, Groundfloor’s executive vice president and co-founder. “We’re on a mission to establish a new and better option for household capital formation by opening the $70 billion private real estate lending market to everyone. This round is a critical milestone on that path.”
Fintech Ventures Fund is a new early-stage venture fund led by Serguei Kouzmine, a seasoned entrepreneur and senior executive with 20 years of experience building high-tech financial businesses. Fintech Ventures Fund said Groundfloor’s is its initial investment out of a new $100 million fund raised earlier this year. The fund is strategically headquartered in Atlanta and focused on non-banking lending/savings products and smart payment systems worldwide.
“We’re bullish on Groundfloor because they are delivering a new, mass-market financial product to an untapped investor class,” said Serguei Kouzmine, Finch Ventures Fund’s managing director. “The fintech market is a global phenomenon, which reaches far beyond both Silicon Valley and the United States; therefore, people should not be surprised that innovation in this market comes from many corners, and Atlanta is one of the hottest.”