Also participating were investors Green Visor Capital, Seven Peaks Ventures and Portland Seed Fund.
CrowdStreet's vision is to "democratize" access to commercial real estate investing using its integrated online investor marketplace and software as a service (SaaS)-based investor lifecycle management solution.
The platform distinguishes itself from other major online real estate investment marketplaces with a direct-investment approach, which reduces risk, improves investor visibility and benefits. It is structured so that the sponsor pays for all services.
There is no fee for accredited investors to register or invest via CrowdStreet.
The marketplace enables investors to diversify their portfolios through co-investments, starting as low as $10,000, alongside commercial real estate developers, operators and capital providers (sponsors).
CrowdStreet says it will use the funds from the Series A round to drive further innovation in its products and core technology and to develop key partnerships while scaling its investment platform.
Co-founder and CEO Tore Steen says CrowdStreet has experienced incredible growth since launching its marketplace in 2014 followed by its SaaS offering which was debuted in May 2015.
"Our unique offering has attracted over 40 commercial real estate clients, with more than $1 billion in institutional-quality assets managed through the CrowdStreet platform,” Steen says.
“Our latest funding will enable us to accelerate our already impressive client growth and continue to release innovations to our platform that redefine real estate fundraising, lead nurturing, investor communications and distribution management for the digital age.”
Rally Ventures general partner Jeff Hinck, who will be taking a seat on the CrowdStreet board, says the business is taking a comprehensive approach to creating a vibrant marketplace for commercial real estate investment that others don’t have.
"Our underlying SaaS technology enables developers and operators to manage the relationship with investors across the entire lifetime of the investment,” Hinck says.
“The CrowdStreet solution has quickly gained traction in the market because of its ability to connect investors with high-quality investments that deliver strong ROI.”
For commercial real estate developers and operators, the company says CrowdStreet provides a multifaceted investor acquisition and management platform on which they can easily publish their investment opportunities.
The direct-investment architecture enables each new investor to become a sponsor’s long-term repeat customer, rather than a one-time, fractional share of a special purpose vehicle as with other online real estate marketplaces.
Sponsors can leverage the CrowdStreet public marketplace or use Sponsor Direct, a white-label version of the software that enables them to publish opportunities directly to their existing websites.
Regardless of which option they choose, once an offer is made, investors are channeled through a single, unified interface where sponsors can electronically review and manage every step of the investment process.
Once investments are approved, investors are given access to a secure, sponsor-branded investment website where they can review the performance of their investments, correspond with sponsors, and review and download documents.
“Global markets continue experiencing distress and there is volatility in U.S. equities, yet the world’s most sophisticated investors are earning outsized returns with continued over allocation to direct real estate investments,” says CrowdStreet co-founder and vice president of Business Development Darren Powderly.
“Bringing direct real estate investment to individuals, like we do at CrowdStreet, couldn’t come at a better time. We are pleased to be leading the next major wave in the evolution of online investing.”