Groundfloor announces $118m in new capital
By Edlyn Cardoza
Groundfloor, the wealthtech platform that allows everyone to build wealth through real estate, is announcing a new round of capital totalling $118 million. The mixed funding round includes $5.8 million in equity from Medipower, as well as $7.2 million in equity from more than 3,600 individual investors via SeedInvest and $5.0 million in convertible notes from 86 individual investors via Groundfloor’s platform. Additionally, as part of the strategic partnership, in its first year, Medipower plans to invest up to $100 million via Groundfloor’s investment platform and up to an additional $220 million in the second year. Medipower’s Chairman Yair Goldfinger will join Groundfloor’s board.
Medipower will participate in Groundfloor’s real estate loans alongside retail investors on the same terms and in a balanced way. There’s no special credit box, no impact on standard origination, underwriting, and servicing processes, and no special advantage over retail investors in return for the scale of capital being committed. This partnership validates once again that Groundfloor’s platform offerings for retail investors meet the institutional quality bar. Additionally, to ensure individual retail investors continue to have equal standing, the amount that Medipower can invest in any one loan is limited, as is the total amount invested each quarter. These safeguards have been engineered to ensure that there is always sufficient opportunity for the retail investor and a greater breadth of opportunity for them over time.
“This is an important moment for Groundfloor’s loyal and rapidly growing base of retail investors and the entrepreneurs whose real estate projects they finance,” said co-founder and CEO Brian Dally. “Retail investors deserve their share of the same pie on which hedge funds, private equity, and all other financially privileged players have been enriched in the modern Wall Street-oriented era. This new strategic relationship supports our mission to deliver that and is purposefully structured to be consistent with our vision for a level playing field in saving and investing.”
Groundfloor plans to use these funds to scale its operations, focusing on customer acquisition and product development. The Atlanta-based company is hiring another 50 new employees in 2022, to nearly double in size, while rolling out its second mobile app and expanding into dedicated markets. Already this year, Groundfloor announced plans to create a local lending footprint in Jacksonville, Florida, as the first of many local joint venture partnerships to come.
“The numbers don’t lie. Groundfloor has a proven track record when it comes to residential real estate in the United States,” said Medipower Chairman Yair Goldfinger. “Their differentiated approach to capital markets and mission to serve retail investors delivers impressive results in loan origination and asset management that align perfectly with Medipower’s goals. We’re excited to enter into this new partnership and power more rapid growth for Groundfloor within the single-family residential housing market.”
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