Fraction raises C$289 mn to ease financial stress in mortgage industry

By Pavithra R

Fraction Technologies, a technology company offering a digital platform that provides socially conscious financial solutions, has announced securing C$289 mn in a combination of equity and debt financing from Impression Ventures, Primetime Partners, Global Founders Capital, and Panache Ventures, among others. 

The FinTech is planning to the finance to launch in Canada, expand its team and technology platform, and prepare for its launch in the United States.

Founded in 2018, Fraction offers a digital platform that empowers homeowners with socially conscious financial solutions they need to live and age well. Its flagship product, the Fraction Appreciation Mortgage, has seen wide reception in North America. It enables homeowners to access the existing value locked in their homes to increase their income or cover unexpected expenses. In contrast to products such as home equity loans or traditional mortgages, the Fraction Appreciation Mortgage has no monthly payments and offers a reasonable interest rate payable upon the sale of the home, or when the homeowner decides not to renew.

“Fraction aligns its interests with the homeowner. Upon the sale of the home, if the home value appreciates, Fraction shares in the upside, but if the home value decreases, there is a protected downside, which helps homeowners preserve their home equity. With over $20 trillion locked in home equity in the U.S. and Canada, no homeowner should be strapped for cash, struggling to pay for their child’s education, unable to pay bills during retirement or unable to help a loved one who has lost their job due to the pandemic. It is a common story to own your home but be barely able to afford anything else,” said Hayden James, CEO and co-founder of Fraction.

Fraction is committed to using technology to create financial solutions that are fair for everyone. Its team includes North American FinTech leaders such as COO/CFO and co-founder Rayan Rafay, and outside-General Counsel Sara Priola, who was previously a co-founder at the fintech unicorn, Figure.

“Refinancing a mortgage with a low rate does not help homeowners with immediate cash needs for retirement income, or unexpected large expenses. Reverse mortgages, can provide that upfront cash, but do not adequately protect the homeowner, and come with higher interest rates and restrictions,” said Rayan Rafay, COO/CFO and co-founder of Fraction, who previously served as CFO/COO and Chief Investment Officer at Unison.