San-Fransisco based Startup RealtyShares raises a $28 million Series C round led by Cross Creek Advisors, with participation from existing investors including Union Square Ventures, General Catalyst Partners, and Menlo Ventures.
On the investment, Tyler Christenson, managing director at Cross Creek Advisors, said:
RealtyShares is positioned to become the leading marketplace for sub-institutional debt and equity commercial real estate investment. These commercial investment opportunities in multifamily, retail, industrial, and office properties have historically been limited to large institutions, and RealtyShares has been able to break down many of the barriers investors have faced.
Further adding to that, John Jarve, partner emeritus at Menlo Ventures said:
Creating an online marketplace for funding middle-market commercial real estate development projects is an enormous opportunity. RealtyShares is the leader in this space and has assembled a stellar team to conquer this market.
RealtyShares, Inc. was founded in 2013 and is based in San Francisco, California. The firm operates an online platform that brings investors, borrowers, and sponsors together to crowdfund real estate investments. Also, it operates an online marketplace that enables its members to browse real estate investments and access investment page for specific offerings.
The company’s platform allows users to access investment opportunities involving various real estate property types, including multi-family residential, office, industrial, self-storage, retail, medical office, and hospitality facilities; securities related to real estate loans; equity investments in commercial properties; and preferred equity investments.
Founder and CEO Nav Athwal claims that the company has over 120K users on the platform. Moreover, the company claims that it has deployed over $500 million across more than 1,000 properties since its inception.
The company makes money from placement fees and asset management fees. Basically, it earns a commission at the time of the investment and also over time. Athwal claims that these fees are lower than the industry average.
The company aims to diversify in real estate in a way that hasn’t been possible before. It also claims that the typical transaction is between $2 million and $50 million.
Although once considered a site for crowdfunding, the company wants to move beyond that label. These days, the company is focused on institutional investors and accredited high net worth individuals.
The company plans to spend the money on improving its technology and brand. They, also, are looking to hire employees with backgrounds in data science, engineering, commercial real estate, originations, and underwriting.
But RealtyShares isn’t the only startup looking to disrupt the real estate investment space. Although the businesses differ, Fundrise, Patch of Land and RealtyMogul are all looking at the larger market opportunity.