Patch of Land secures over $23m in Series A round of financing
Californian real estate crowdfunding company, Patch of Land, recently announced that it has secured $23.6 million (£15.9 million) in its first attempt to seek financing.
The oversubscribed Series A round was led by SF Capital Group, a private investment firm focused on direct equity and debt investments in the financial technology space. Neil Wolfson, President of SF Capital Group will join the Board of Directors at Patch of Land as part of the financing deal. Ron Suber, the President of fellow California-based peer-to-peer lending company Prosper Marketplace, also participated in the round of financing as a strategic investor.
The finance raised far exceeds the $17 million that the company claims to have raised for real estate projects since its 2013 inception. Increased investor confidence in the real estate crowdfunding sector is becoming ever more apparent. Only last year rival company, Fundrise raised a record $31 million in financing from firms such as Ackman-Ziff Real Estate Group.
However, Patch of Land is slightly different to Fundrise, in that the company focuses solely on lending to those looking to invest in real estate developments. Since 2013, the firm has provided one-year residential purchase options and rehab loans of under $1 million. However, the company is now intending to put the $23 million of capital to good use and expand its range by originating loans between $1 million and $5 million. Terms of three to five years will also be introduced, alongside commercial and new-construction loans, according to CEO Jason Fritton. Furthermore, a significant amount of the funds raised will be used to recruit new employees such as loan officers, underwriters and processors. Fritton commented:
“We are very pleased to have completed this round of financing. We look forward to working with SF Capital Group and welcome Neil to our board. Neil and Ron understand marketplace lending and their collective advice and network of contacts will be integral to our continued growth and success.”
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