Startup plans to enter the commercial real estate space
RealtyShares, the company which pools together debt and equity investments, has raised $28 million (£20.68 million) for commercial real estate investing. It has raised the sum for a range of commercial investments that includes apartments, office buildings and retail centres.
The San Francisco-based starup aims to move beyond its crowdfunding business and enter the commercial property sector. Founder and CEO Nav Athwal says that RealtyShares has thousands of users on the platform. It has deployed $500 million (£369 million) across more than 1,000 properties, he said. The company is raising a $28 million (£20.68 million) Series C round led by Cross Creek Advisors, with participation from existing investors. The starup’s current investors include Union Square Ventures, General Catalyst Partners, and Menlo Ventures.
The company, founded in 2013, plans to diversify in a big way. It aims to reach new levels like never before. Athwal said that RealtyShares aims to “diversify in real estate in a way that hasn’t been possible before”. He said that the typical transaction is between $2 million (£1.48 million) and $50 million (£36 million).
Although once considered a site for crowdfunding, Athwal says he’d like to move beyond that label. These days, RealtyShares is focused on institutional investors and accredited high net worth individuals.
At present, RealtyShares is engaged in placement fees and asset management. 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.
Tyler Christenson, managing director at Cross Creek Advisors, sent us a note saying his team led the investment round because he believes
“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.”
John Jarve, partner emeritus at Menlo Ventures says he invested because
“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 plans to invest the money on improving its technology, brand and hiring more resources. Athwal says they are looking to hire employees with backgrounds in data science, engineering, commercial real estate, originations, and underwriting.
However, there are a number of other startups as well that are looking to disrupt the real estate investment sector. These firms plan to enter the lucrative real estate market. That will make RealtyShares competitively placed against other starups such as Fundrise, Patch of Land and RealtyMogul.