Crowdfunding platform PeerStreet closes $60M Series C funding to give investors easy access to real estate backed loans
PeerStreet, a crowdfunding platform that gives investors easy access to high-yielding loans that are collateralized with real estate, has closed $60 million Series C funding round to help the real estate startup hire top talent and scale its two-sided marketplace—the first and largest of its kind for investing in real estate debt. The round was led Colchis Capital led, with a consortium of institutional investors. Existing investors Andreessen Horowitz, World Innovation Lab and Thomvest Ventures also participated.
In addition to the Series C funding, PeerStreet has secured $4.25 billion in new capital commitments from institutions to purchase loans through PeerStreet’s proprietary platform. These commitments will bolster PeerStreet’s existing suite of short-term bridge loan products and grow the recently launched 30-year buy to rent loan program. Since March 2019, over $2 billion has been transacted on PeerStreet platform.
Founded in 2013 by real estate attorney, Brew Johnson and former Google executive, Brett Crosby, the El Segundo, California-based PeerStreet allows investors to easily invest in high-yield real estate loans that were historically very difficult to access. PeerStreet is secure and intuitive with an easy-to-use interface. PeerStreet is an investment platform that democratizes access to real estate debt investments.
With PeerStreet’s unique technology-driven marketplace, accredited investors are able to diversify their capital in a fixed-income asset class that had previously been difficult for individuals to access.
Loans are sourced from vetted private lenders throughout the United States who often have regional real estate expertise and long-term borrower relationships. PeerStreet enables these lenders to expand their lending capital, empowering them to make more loans, which flows through to borrowers who in turn improve their local communities—one house at a time.
“We’ve been a strategic partner of PeerStreet for years as an investor in the company and in loans on the marketplace. Leading this round was a natural next step for us,” said Ted Conrads, co-founder and president at Colchis Capital. “We’re excited to be a part of their growth as they continue to innovate as the market leader.”
“2019 has been an incredible year of growth for PeerStreet, and this funding round will accelerate that growth,” said Brew Johnson, PeerStreet’s CEO and co-founder. “The injection of equity capital into our business via the Series C, combined with strong demand from loan buyers, means we will continue to provide value for lenders, end borrowers, and investors for years to come.”
Each investment opportunity PeerStreet offers is reviewed both algorithmically by the company’s technology platform, as well as manually by experienced in-house real estate and legal teams. The company then aggregates those loans for institutional and accredited retail investors, who in turn provide PeerStreet-approved lenders with capital. Those lenders then make loans to end borrowers who buy properties, improve them, then either sell them to homebuyers or rent them out to tenants.
“I think our society is at a crossroads—there is a shortage of housing in many areas of the country and nearly 40 percent of existing homes were built before 1970. We can either build more homes and continue to take over green spaces, or we can up-cycle the existing aging and dilapidated housing stock,” said Brett Crosby, PeerStreet’s COO and co-founder. “PeerStreet’s business model ultimately supports real estate entrepreneurs doing the latter, curing the capital constraints that have held them back and allowing them to reinvest in American communities.”