In 2013, the company Crowdstreet was formed in hopes of transforming the commercial real estate industry. This past week, they announced a big step towards that end goal. Through crowdfunding, the Portland, Oregon-based company was able to raise $8 million in a Series B funding. Currently, the platform has more than 100,000 investors and has raised over $300 million in capital through a series of more than 200 different offerings.
As a whole, the platform hopes to use technology to make the commercial real estate marketplace more accessible than ever been before. The platform achieves this by bringing together investors and real estate developers. In this sense, the real estate develops are able to manage their properties online and also acquire capital on the same platform. Crowdstreet connects the developers and investors together in a simple, online platform, and only charges the developers a posting fee.
Throughout the past two years, the company has seen significant uptake in the number of investors who are getting involved with the platform. In the words of current CEO, Tore Steen, investors are “recognizing the value of investing directly into commercial real estate.” Steen went on to say, “its really working with great sponsors, the commercial real estate developers and operators, and really finding those sponsors across the country who have a strong affinity for growing a base of investors.”
With the newest funding led by Grotech Ventures, CrowdStreet hopes to expand to new areas in the commercial real estate market. Some of the existing investors, such as Rally Ventures, Seven Peaks Ventures, and Green Visor Capital are on board with the idea as well.
In addition to the marketplace for developers to easily interact with investors, Crowdstreet offers a unique software solution to the users of its platform. The solution, referred to as the “Crowdstreet Investment Software”, allows sponsors to access more information than other platforms and sites to allow them to effectively monitor and manage their investments. In addition to this service, Crowdstreet sets itself apart by providing that all in one solution. Sponsors and develops alike do not need to access different softwares or platforms to gather all the information or investors they need; but rather, Crowdstreet provides it all. In a quote obtained by Steven Loeb in a recent interview with Steen, Steen further capitalized on the all-in-one notion.
“They might use a standalone DocuSign to do documents, but it doesn’t store it in a central place. They might use an accounting system to do their distributions but the data from that distribution doesn’t get rolled up into a beautiful investor portal that allows an investor to see their position in those investments. They might use certain e-mail marketing tools, or CRM tools, but everything’s kind of a point solution, and the beauty is our software pulls that all together; it does everything that a sponsor would need to manage that investor for the entire lifecycle. And they’re managing these investors, not just for a year, they’re managing these investors for many years to come.”