RealtyShares, an online marketplace for real estate investing, connecting accredited investors to real estate investment opportunities nationwide, announced today that it has obtained a $20 million Series B financing round. The new financing was led by Union Square Ventures, a leading venture capital firm in the financial technology space, with participation from existing investors Menlo Ventures and General Catalyst Partners.
“I am incredibly excited to have one of the foremost VC firms leading this latest financing round,” said Nav Athwal, the CEO of RealtyShares. “Very few can match the Fintech acumen of Union Square Ventures, which has led financings for Lending Club, Kickstarter, Funding Circle and CircleUp, as well as other name brands such as Twitter, Zynga, Etsy, Tumblr and Meetup. This financing ensures that RealtyShares will remain a committed and well-capitalized partner to our investors and our sponsor and borrower constituencies.”
“We are thrilled to participate in RealtyShares’ most recent financing,” said John Buttrick, a partner at Union Square Ventures. “We believe Nav and his team are developing the leading internet-based platform for real estate investing and could not pass up the opportunity to invest. We look forward helping the company continue its strong growth trajectory. We believe we are still in the early stages of transforming real estate investing and expect RealtyShares to be a leader in this transformation.
“This funding comes as we are launching a new diversified equity fund targeted at institutional investors, which will help accelerate the growth in our capital base” said Athwal. “The ‘small-balance’ commercial real estate market that includes properties valued at less than $50 million has been a sector that is not currently well served by larger institutional and foreign investors. Since value-add opportunities in that space often offer better yields and more diversification than Class A properties, we believe that institutional investors will appreciate leveraging RealtyShares’ core expertise in this sector to gain exposure to a new market area.”
“With this latest round of financing, we will also continue our marketing outreach, our overall hiring efforts, and our technology development,” continued Athwal. “There are many data-driven opportunities in this space that we expect to address, but we also want to maintain our focus on originating investment opportunities in the sub-institutional area – where some of the best investment opportunities are often found. RealtyShares already offers one of the broadest product lines in the industry, and we will expand our product offerings in the very near future.”
The RealtyShares platform has to date raised over $130 million for over 290 investments in over 1600 properties, making it one the largest real estate crowdfunding platforms in the US. The site currently offers fix-and-flip loans, preferred equity and other mezzanine financing products, joint venture equity, and commercial loans alongside key institutional capital partners.
“We are delighted to follow on our earlier Series A investment with additional participation in this Series B round,” said John Jarve, a partner with Menlo Ventures, the lead financier in RealtyShares’ Series A financing. “I’ve been impressed with Nav and his team and their execution to plan in recent months. We at Menlo remain convinced that RealtyShares is well positioned to disrupt the real estate investment market, and we welcome Union Square Ventures as a partner in helping to steer the company toward the realization of that goal.”
“First impressions don’t often hold up, especially when it comes to founders – building a company is excruciatingly difficult and few succeed,” said Christine Tsai, founding partner of 500 Startups. “Nav is one of those exceptions. From the beginning when we accepted RealtyShares into the 500 Accelerator, my first impression was that Nav possessed not only strong domain expertise, but more importantly the character, hustle, and leadership to build a reputable brand and successful team. Having worked closely with him during Batch 7 and watching him grow the company to where it is today, it’s clear my first impression has held true.”
“Nav and his team are building a category-defining company serving a massive and inefficient market. The Realtyshares’ product offers a delightful experience for both investors and real estate project sponsors”, said Niko Bonatsos, venture partner, General Catalyst Partners. “We have been partners with Nav since 2014, when we were fortunate to have led Realtyshares’ first round of funding.”
“RealtyShares will likely become a “one-stop shop” for capital for real estate transactions – whether debt, equity, or mezzanine financing,” Athwal explained. “Our preferred equity products have already begun to exploit a real void in the marketplace left by the dislocations of the Great Recession, and we expect that such products will soon lead to an expansion of our commercial lending business as well. Our upcoming diversified equity fund will be a first step toward increasing our presence among institutional and high net worth investors. Then, as we continue to grow, we’ll also continue to work on how technology can aid in the disruption of real estate investing — an “old school” space where historical ways of doing business still predominate. We look forward to working with our investors and advisors from Union Square Ventures, Menlo Ventures, and General Catalyst Partners in exploring new ideas about how to best transform this sector of financial services.”