Published On:Thursday, 9 April 2015
Posted by Chaudhry

REALTYSHARES RAISES $10M IN SERIES A ROUND

RealtyShares Raises $10M in Series A Round
RealtyShares, a real estate crowdfunding platform for accredited investors, announced yesterday that it’s raised $10 million in a Series A round from Menlo Ventures and General Catalyst Partners.
The company has previously raised $1.9 million in a seed round led by General Catalyst.
RealtyShares is a crowdfunding platform that allows accredited investors put in as little as $5000 in a property. The company, which opened up to investors just over a year ago, claims that it has funded hundreds of properties (both residential and commercial) that are worth over $300 million. The investments earn, on average, returns in the 8 to 20 percent range; founder and CEO Nav Athwal told TechCrunch that, so far, investments on the platform have paid back $2 million in capital.
The platform is appealing to developers because they are able to raise capital from the crowd within four days, on average. Much like on other crowdfunding platforms, if a campaign doesn’t meet its funding goal, the money invested is returned to investors.
The reluctance of banks to provide loans (especially to small firms) following the financial crisis has helped to make crowdfunding an attractive alternative, and RealtyShares says it is receiving around 1000 applications from borrowers each month. Processing all the applications, however, takes time and effort that the startup has not had. That’s where the latest Series A investment comes in.
“Our priority is to continue to develop our proprietary underwriting engine to efficiently vet and qualify these applications,” said Athwal in a press release. “Demand from investors and borrowers has been tremendous, which isn’t surprising given the success of platforms like LendingClub and OnDeck. With the additional funding, we will expand our team and technology to scale more quickly while continuing to offer the same superior customer service.”
Athwal recently appeared on Fox Business to discuss his company’s raise and real estate crowdfunding more generally. You can watch the interview below.

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