The company, which offers a crowdfunding platform that pools together debt and equity investments for apartments, office buildings and retail centers, said its latest Series C round was led by Cross Creek Advisors, with participation from existing investors including Union Square Ventures, General Catalyst Partners, and Menlo Ventures.
RealtyShares is widely considered to be one of the leading real estate crowdfunding platforms around, boasting some 120,000 users. The company also claims to have facilitated more than $500 million in investments in over 1,000 properties since its launch in 2013.
Speaking to TechCrunch, RealtyShares founder and CEO Nav Athwal said the company plans to “diversify real estate in a way that hasn’t been possible before.” In order to do so, RealtyShares is focusing on moving beyond just crowdfunding to entice institutional investors and accredited high-net-worth individuals.
The company’s business model is based on asset management and placement fees. In essence, that means it makes commissions on each investment, both at the time the investment is made and also at regular intervals later.
“RealtyShares is positioned to become the leading marketplace for sub-institutional debt and equity commercial real estate investment,” said Tyler Christenson, managing director of Cross Creek Advisors, in a statement. “These commercial investment opportunities in multifamily, retail, industrial, and office properties have historically been limited to large institutions, and RealtyShares has been able to break down many of the barriers investors have faced.”
Despite this praise, RealtyShares will face some tough competition in the new markets it’s entering. While their business models differ, companies such as RealtyMogul and Fundrise are both looking at expansion towards larger opportunities, just like RealtyShares has.
For now, RealyShares plans to use the new funds to improve its technology platform and expand its teams, looking for new talent in fields like data science, engineering, commercial real estate, originations and underwriting.
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