fundrise Archives - Tearsheet

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming weekly newsletter.[/alert]

Stephen Klein: LOYAL3 is turning IPO stock into a powerful, new brand engagement currency (Tradestreaming)
With LOYAL3, it’s not just investing in companies you know – it’s investing in brands you love. The company is building an interesting distribution model connecting investors with brands and brands with their customers.

RealtyMogul Completes Innovative Debt and Equity Combo Transaction (BusinessWire)
RealtyMogul announces a first of its kind, full capital stack transaction combining debt and equity with the successful purchase of a 112-unit apartment in North Carolina. Investors using equity crowdfunding for real estate are getting treated to a lot of innovative investment opportunities.

The emergence of regtech as a catalyst for innovation (BANKNXT)
What are regtech (regulation technology) startups working on, and can they solve banks’ compliance headache? This article describes what regtech is and how it can jumpstart a lot of innovation across the fintech ecosystem.

Fundrise’s Brandon Jenkins on the need to keep raising the quality of real estate deals online (Tradestreaming)
Fundrise is seeing a lot of success with its online real estate investing platform. And now, it just raised $50M for an e-REIT for everyone as part of the new crowdfunding rules.

VCs investing over $500 Million in follow-on funding for companies crowdfunding (Crowdfund Insider)
If over $500M of follow-on funding happened off your platform, you’d want a piece of that, too, right? That’s one big reason why Indiegogo is interested in getting into the equity crowdfunding game.

StockTwits and Robinhood: Teamed up to Provide Social Trading (Howard Lindzon)
As part of a wider integration push, Robinhood announced an integration with the investor social network, StockTwits. Like an investment idea your connection is pitching? Click and trade – for free.

Bleu Unveils its Beacon-Powered Point-of-Sale Solution (Finovate)
Bleu’s solution around Bluetooth technology can move payment data over long distances and ranges: from a nearby transaction at a fast casual restaurant terminal to reaching a terminal in a fancier restaurant that may be several meters away.

Apple Pay to Be Available in China by February 2016 (Let’s Talk Payments)
In the latest quarter, China amounted to 27% of Apple’s revenues and now the WSJ reports Apple is launching its payments into the Chinese market early next year.

Trōv: a new way to insure the things people care about (Daily Fintech)
“Trōv is an app that collects data about your things, builds it into a list, then provides machine enhanced risk pricing for single item coverage. Trōv provides micro-duration policies (down to the second), charges micro-premiums (down to the cent) and uses chat robots to manage claims.”

Startups raising/Investors investing

Vanare | NestEgg Raises $3.25 Million in Seed Capital to Drive Fintech Innovation (Biz Journals)
Last week, Vanare announced the launch of Synapse, the first-ever fully customizable white-label roboadvisor API. The simple, flexible and scalable solution allows financial service firms the ability to create their own user interface (UI) so that their clients have a seamless experience using the firm’s existing website.

Interview with Santander InnoVentures managing partner Mariano Belinky (Business Insider)
Santander InnoVentures managing partner Mariano Belinky talks blockchain, roboadvisors, and challenger banks.

Online Lender LoanDepot Tries Plan B After Canceling IPO (American Banker)
Bryan Sullivan, the CFO at LoanDepot, talks about its growth prospects without fuel from an initial public offering, how getting consumers to opt for home equity lines of credit is tough, and why he considers the nonbank a disruptor.

Photo credit: V31S70 / VisualHunt.com / CC BY

Fundrise is a leader in online real estate investing and it’s soon to get even more interesting as recent regulatory changes are making it easier for crowdfunding platforms to incorporate even more investors. It’s an interesting time for the firm: it recently announced it had raised $50M for an e-REIT in light of the new Regulation A+ changes.

Fundrise COO, Brandon Jenkins joins us to talk about the state of his business, how competition in online real estate investing is changing the market, and how he thinks 2016 is going to turn out to be a huge year in his industry.

What was the inspiration for creating Fundrise? What was the genesis story?

The idea behind Fundrise came out of the personal experience of our founding team as real estate developers in Washington, DC. After an unsuccessful experience seeking funding for a new type of real estate project with local tenants, we saw an opportunity to open up the world of real estate investing to a broader audience.

More players are entering the online real estate investing space — how do you differentiate yourself? How do you think the market is organizing (is it around debt/equity or residential/commercial?)

First and foremost quality. We only work with the best quality real estate companies and search through hundreds of deals a week selecting only the top 1% to actually offer as investments.

Second, we focus on providing unmatched customer experience by creating a one-of-a-kind platform. Our technology is 100% designed and built in house…from scratch, so that the experience of investing on the platform is as straightforward and enjoyable as possible.

How big a role does education play in investor acquisition?

When you democratize an asset class for the first time, you’re naturally going to connect with investors who’ve never picked their own real estate investments before.

To that end, we take education very seriously.

Our biggest concern right now is around the quality of deals being done by other platforms in the space. We’re seeing other companies do bad deals, with bad prices and bad terms so we feel that we have an obligation to give investors the tools they need to make smart, informed decisions — whether that’s a deep dive into our underwriting process or a rating system for understanding risk-return tradeoffs.

You moved from a brokerage model to more of an origination model — why? how did that position you differently?

Funding all our investments upfront using our own $25M balance sheet has a few key benefits:

1. You see higher quality investments: We can negotiate better deals with top real estate companies because they require certainty of funding. By funding real estate projects upfront, we believe we are able to achieve superior pricing and terms, and source more investment opportunities from the best companies in the country.

2. You start earning immediately: Interest starts accruing as soon as your investment settles—typically within five days—eliminating lengthy escrows. This model more closely resembles stocks, bonds, and other publicly-traded securities.

3. Your interests are the same as ours: Fundrise pre-funds every real estate project, using our own balance sheet. This puts our “skin in the game” and shows our conviction in the deal.

Where is your business/market headed in 2016 and beyond?

Since we founded the industry back in 2012, real estate crowdfunding has seen tremendous growth. But it’s really just beginning. 2016 will be a huge year for the space. I think we’ll start to see consolidation of platforms and some platforms really start to own one and dominate an asset class — like the SFH market. Investors will begin to enter the space in droves.

Tag: fundrise

The Startups: Who’s shaking things up (Week ending November 29th, 2015)