Concreit closes on $ 6 million to allow more people to invest in the global private real estate market – TechCrunch
concrete, a company that wants to open up real estate investing to a larger group of people, today announced that it has closed $ 6 million in a seed funding round led by Matrix Partners.
Hyphen Capital also participated in the round, in addition to individual investors such as Betterment Founder and CEO Jon Stein; Andy Liu, partner at Unlock Venture Partners; and investor and advisor Ben Elowitz. Concreit raised the capital to a Post-currency valuation of $ 22.5 million.
The Seattle-based startup also launched its app today, which it says allows “anyone” to invest in the global private real estate market for as little as $ 1.
It is a high claim. But let’s start with a little background first.
Concreit is not the first time that co-founders Sean Hsieh and Jordan Levy have worked together. The pair previously founded and seeded the Flowroute VoIP communications platform before sell it to West Corp. in 2018. Upon the sale of this business, Hsieh and Levy decided to start a business that, in their words, “could help everyday people become more financially secure.”
Hsieh, a second generation immigrant, worked in his family’s restaurant where they shared the dream of achieving financial freedom through real estate. Likewise, Levy says he grew up watching his parents start a small construction business from scratch. He was intrigued by the idea of passive income through single-family rental homes, but became disillusioned with the overheads, risks and hassle of managing his own single-family rental investments.
The duo therefore worked together to design a mobile first offer that could allow small investors to benefit from real estate “without having to make repairs at 2 am on a Saturday”. Enter Concreit.
Today, most investors can open a Concreit account and make their first investment in minutes on their mobile device, the company says. The company’s free mobile app allows consumers to invest as little as $ 1 in a fund managed by a team of investment professionals. Withdrawals can be requested at any time through the app and sent after approval.
The platform facilitates weekly earned payments, automated investments, and on-demand withdrawals while composing weekly earned payments.
After selling Flowroute, Hsieh says he “saw the opportunity to earn excellent APR from private real estate investing while gaining less correlation with traditional public stock or bond markets,” Hsieh said. “But they only concerned commitments of capital already rich or required over several years. Concreit gives everyone access to a real estate portfolio and the ability to access withdrawals when they need them.
Put simply, the startup wants to make investing in real estate easier for everyone, not just the rich.
Concreit, Hsieh said, gives “ordinary people” the ability to access real estate strategies typically used by large hedge funds and private equity.
“We are seeing an increase in demand from retailers for alternatives and other ways to invest outside of the public markets and the crypto space for those who value diversification,” Hsieh told TechCrunch. “Most of the other competitors are focused on marketing and selling securities, but we knew that to be an innovator in this area we had to produce a truly unique experience for our investors.
Concreit’s platform is designed to deliver a more connected investing experience.
“We knew early on that digital natives deserved a whole new real estate investment experience and that it had to be 100 times better than just taking traditional real estate investment opportunities and delivering them digitally,” Hsieh said.
So on the platform side, Concreit has built a proprietary, cloud-based securities accounting engine that allows the company to process fractional calculations and integrate many mutual fund practices, bringing them together. applying to “more labor intensive” private equity markets, with a focus on real estate.
“We have taken a lot of the cloud architecture work we started in the telecom space and applied it to a back office accounting solution that gives us a competitive advantage over what we offer at our investors, ”Hsieh said. “This allows the accounting to run at a higher frequency, which allows us to execute weekly dividends, process fractional redemptions and ultimately a more real-time experience for our users. “
Concreit’s First Private REIT Fund Focused on Passive Income Consists of Low Risk Fixed Income first mortgage loans for residential and commercial real estate in the private market. The fund, including the The company claims to have an annualized return of 5.47%, is managed by a team of industry professionals. The startup has added more than 18,000 clients to its platform since being qualified by the SEC (just over a year ago), and doubled its user base in August.
“OOur current users can invest in any amount, no lock-in, weekly payments, and an experience as easy and familiar as a savings account, ”said Hsieh.
Matrix Dana stalder, who joined the Board of Directors of Concreit in connection with the financing, believe Concreit leveled the playing field for real estate investing by making it more accessible.
“What Concreit has built is incredibly difficult to achieve from a technological and regulatory point of view” he told TechCrunch. “Alternative asset classes, in particular, have been notoriously closed to the average consumer, leaving high yielding returns exclusively to high net worth investors. “