Real Estate Crowdfunder Raises $118M In Series B Funding
Israeli real estate company Medipower provided $5.8M in equity, while $7.2M was provided by over 3,600 individuals through separate startup investment platform SeedInvest, TechCrunch reported. Going forward, Medipower announced it would invest $100M in the first year and $220M in year two. Medipower Chairman Yair Goldfinger will join the Groundfloor board, the company stated in a release. Groundfloor, which is based in Atlanta, had previously raised $5M in its Series A round.
"[Groundfloor's] differentiated approach to capital markets and mission to serve retail investors delivers impressive results in loan origination and asset management that align perfectly with Medipower's goals," Goldfinger said in a release. "We're excited to enter into this new partnership and power more rapid growth for Groundfloor within the single-family residential housing market."
The company's initial funding was made possible by the 2012 Jumpstart Our Business Startups Act. The act, co-authored by Groundfloor co-founder Nick Bhargava, allowed small businesses to fundraise up to $75M from nonaccredited investors, TechCrunch reported.
Individual investors helped fund the investment round, and the company itself allows over 150,000 nonaccredited investors to invest in real estate debt. It has presence in 49 states and lends capital to real estate in 35 states.
Groundfloor launched last year, and has facilitated $22M in investment so far, TechCrunch reported. Revenue grew 114% last year, to $12M, and the company states investors have a 10% average return.
The Series B funding will allow Groundfloor to add 50 employees to its 70-person staff, largely engineers. Co-founder Brian Dally told TechCrunch that it plans to reach 1 million investors in several years.