Groundfloor is an American real estate investing and

lending In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...

marketplace. It was the first real estate

crowdfunding Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over was raised worldwide by crow ...

company to achieve SEC qualification utilizing Regulation A+ since the regulation became operable through the

JOBS Act The Jumpstart Our Business Startups Act, or JOBS Act, is a law intended to encourage funding of small businesses in the United States by easing many of the country's securities regulations. It passed with bipartisan support, and was signed into ...

. Groundfloor was purposely built to serve self-directed investors instead of institutional ones. By October 2018, Groundfloor had loaned more than $70 million across over 500 properties in the United States and had fundraised $13.8 million.

History

Groundfloor was founded in

Raleigh, North Carolina Raleigh (; ) is the capital city of the state of North Carolina and the List of North Carolina county seats, seat of Wake County, North Carolina, Wake County in the United States. It is the List of municipalities in North Carolina, second-most ...

, in February 2013 by Brian Dally (who launched

Republic Wireless Republic Wireless (stylized in all lowercase) is an American mobile virtual network operator (MVNO). It is a subsidiary of Dish Wireless. Republic sells low cost mobile phone service on its partner AT&T's network. Republic started as a unique comp ...

) and Nick Bhargava (contributor to the

). In March 2014, the company raised $300,000 from

angel investor An angel investor (also known as a business angel, informal investor, angel funder, private investor, or seed investor) is an individual who provides capital for a business or businesses start-up, usually in exchange for convertible debt or owners ...

s in the region. After raising $1 million in

seed funding Seed money, sometimes known as seed funding or seed capital, is a form of securities offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term ''seed'' su ...

, Groundfloor moved its headquarters to

Atlanta Atlanta ( ) is the capital and most populous city of the U.S. state of Georgia. It is the seat of Fulton County, the most populous county in Georgia, but its territory falls in both Fulton and DeKalb counties. With a population of 498,715 ...

because of the Invest Georgia Exemption (IGE) which allows state residents to invest in crowdfunded projects regardless of their investor accreditation status. In August 2015, Groundfloor became the first real estate crowdfunding company to achieve SEC qualification under Regulation A+, since the regulation became operable through the

. The company subsequently opened investing in

California California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...

Illinois Illinois ( ) is a U.S. state, state in the Midwestern United States, Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolita ...

Maryland Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean to ...

Massachusetts Massachusetts (Massachusett language, Massachusett: ''Muhsachuweesut assachusett writing systems, məhswatʃəwiːsət'' English: , ), officially the Commonwealth of Massachusetts, is the most populous U.S. state, state in the New England ...

Texas Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...

Virginia Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth ar ...

Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered on ...

Georgia Georgia most commonly refers to: * Georgia (country), a country in the Caucasus region of Eurasia * Georgia (U.S. state), a state in the Southeast United States Georgia may also refer to: Places Historical states and entities * Related to the ...

and the

District of Columbia ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...

in the fall of 2015. By late October, Groundfloor sold out every loan originally listed. By December, the company had funded 54 loans and sold more than $3 million in Limited Recourse Obligation securities. It also closed a $5 million

Series A round A series A round (also known as series A financing or series A investment) is the name typically given to a company's first significant round of venture capital financing. The name refers to the class of preferred stock sold to investors in exchan ...

, bringing its total financing to $7.5 million. The round was led by Fintech Ventures, a $100 million venture capital investment fund focused on innovation in non-bank lending, savings and smart payments, managed by Serguei Kouzmine. Groundfloor announced it would use the money to expand its business beyond the present nine states where it operates. In 2017, Groundfloor originated $30 million in loans. By October 2018, the company had loaned more than $70 million across 500 properties in the United States, one third of which are in Atlanta. Following $4.2 million secured from 2304 investors during the 2017-18 campaign, as of October 2018 the company had fundraised $13.8 million.

Platform

Groundfloor was purposely built to serve self-directed investors instead of

institutional investor An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...

s. Its marketplace provides short-term, high-yield returns backed by real estate. Typical loans return 12 percent annually on a six-to-12-month term. In November 2015, Groundfloor 2.0 was introduced, reducing the minimum investment to $10. Groundfloor targets residential-development projects. They use a proprietary loan grading algorithm in addition to application review to assign a loan a letter grade and corresponding rate. Loan terms generally range from six to 12 months and financing can be in a senior or junior position. In October 2015, Groundfloor introduced two new tools that expand

peer-to-peer lending Peer-to-peer lending, also abbreviated as P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Peer-to-peer lending companies often offer their services online, and ...

of real estate: quick comparison of loans and in-depth analysis of loan grading factors.

References

External links

* {{Official website, http://groundfloor.us
Marketplace.org
Investment companies of the United States Companies based in Raleigh, North Carolina Financial services companies established in 2013 Peer-to-peer lending companies Crowdfunding platforms of the United States

History

Platform

See also

References

External links