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Realty Mogul will use the funding to continue expanding across the U.S., and open new offices
People who have money, and intend to make more money, seem to always be putting at least some of it into real estate. Getting into that market, though, was not easy. Opportunities are inaccessible, and the process of getting the equity together can be extremely slow and a major hassle.
Realty Mogul, an online marketplace that makes real estate investing fast and frictionless, is looking to change that. The company just raised a $35 million Series B financing round, it was announced on Tuesday. The round was led by Sorenson Capital with additional funding from Canaan Partners, the lead investor in the company’s Series A financing.
The company had previously raised a $10 million in funding, including a $9 million round in May of 2014. With this round Realty Mogul has now raised $45 million from investors that have included David Rose, Gordon Stephenson, Matthew Grodin, Timothy Lappen, Steve Bram and Shamir Karkal.
Operational since March 2013, Realty Mogul is an online marketplace for real estate investing, where investors can pool their money together to put property.
Here's how it works:
All a user has to do is sign up for an account, which is free. The site is currently open to accredited and international investors; an accredited investor is individual who has an income of at least $200,000 per year or a net worth of $1 million.
Once they are verified, users can browse the marketplace, and learn about specific investment, and get information that includes estimated length of the investment, estimated annual return, property and location information and a profile for any companies or individuals involved in the investment.
Once the user finds a suitable property, they can sign the legal paperwork online, and then submit payment for their investment either via check or wire. Then they wait for it to clear, which Realty Mogul keeps them up to date on via both email and the investor dashboard.
To date, the company has already helped fund 240 properties totaling more than $500 million in value. There are also a combined 40,000 investors and real estate professionals currently on the site.
Realty Mogul has some big plans for this funding. It has been growing fast, going from 10 employees to 80 in the last year. With this funding it plans to be north of 100 by the end of the year, hiring more technologists and data scientists, including both back end and front end engineers, as well as mathematicians, Jilliene Helman, CEO of Realty Mogul, told me.
It will also be expanding geographically. Currently in 23 states, the company plans to expand to markets that include Texas, Atlanta and New York City, opening new offices, which will be part of its hiring strategy.
"These are substantial real estate markets, with a lot of professionals concentrated into small areas," said Helman. "This will help us to get our name out there, and by putting offices in NY or Texas, we will get a lot of exposure."
And finally, the company will use the funding to build out its technology platform, which uses big data to get smarter about risk profiling in real estate.
"It's about getting smarter. We have seen about $6 billion in property value over the last two years, and we want to expand that to $10 billion or $20 billion, then use that to enhance our algorithm and make out software more intelligent. Right now we don't have the resources and quantity of data to get even smarter around risk and reward," said Helman.
"We will integrate more data sources, but that is very expensive. We will be figuring out what are the best data sources and the best predictive indicators."
Ultimately, the company wants to change the way real estate is financed.
"Our vision is to be a one stop shop for capital markets for real estate on the Internet. We want real estate companies to come online and get a variety of sources of capital in one place. Whether that be debt capital, or equity capital, we want it to be very seamless by changing the user experience," she said. "If there is one word to describe what we're going to do it would be 'innovation.' We are changing the way real estate is financed, whether they're the borrower or sponsor, we are changing what they have to do to raise capital."
The mark of success, she said, is making the experience "refreshingly delightful." And one other way as well.
"Not only have we invested $80 million, we have also gotten a lot of money out of the system. That is as important as getting money into system. We have given $8 million back to investors. People actually see money come out of the system," she said. "That is important because it means the process is working.”
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RealtyMogul.com launched in 2013 with one mission: simplify real estate investing by connecting real estate companies and investors through cutting-edge technology.
Today we are a leading online real estate capital marketplace, offering commercial equity and commercial debt products nationwide, educating our investors, and building a company that will change real estate investing and financing forever.
RealtyMogul.com brings over 200 years of collective experience underwriting, managing, and acquiring over $5 billion in real estate across asset classes and markets nationally.
We have made significant investments in Data Science, Technology, Legal and Operations. Our core value, “Access Through Innovation” and our commitment to “Investor Protection” inspire us to bring the best experience to borrowers and investors alike.
Since our inception, RealtyMogul.com has funded over $190MM, totaling over $700MM in aggregate property value. Our crowdfunding investment platform has grown past 23,000 accredited investors. To date, RealtyMogul.com has returned over $25MM in principal and interest to our investors.
RealtyMogul.com’s growth story continues in 2016. With six locations in San Francisco, Irvine, Houston, Atlanta, New York City and a major expansion at our Los Angeles headquarters, we are poised to lead the online real estate investing revolution.