Groundfloor announces $118 million in new capital
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<span class="legendSpanClass">Medipower, specializing in commercial real estate across the East Coast, enters new strategic partnership with Groundfloor, alongside investment from public shareholders</span> <span class="legendSpanClass">Round reflects further support of Groundfloor's unique investment products and mission to open capital markets to everyone</span>
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ATLANTA, Feb. 21, 2022 /PRNewswire/ -- Groundfloor, the wealthtech platform that allows everyone to build wealth through real estate, is announcing a new round of capital totaling $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 own 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, in order to ensure individual retail investors continue to have equal standing, the amount that can be invested by Medipower in any one loan is limited, as is the total amount that can be invested each quarter. These safeguards have been engineered to ensure that there is always not only sufficient opportunity for the retail investor, but 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, with a focus 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 funding news comes on the heels of significant growth and new product successes. In 2021, Groundfloor:
- Launched a new way to save and invest with its Stairs mobile app, offering investors 4-6% in annualized returns and already seeing more than $22 million invested;
- Continued to provide investors healthy returns from its LROs, averaging 10% returns across all its real estate loans;
- Grew to more than 150K registered users with over $220 million in assets under management, achieving 114% revenue growth to $12.0 million;
- Was recognized for many awards including the Inc 5000 list of fastest-growing companies, the Deloitte Fast 500 Technology list, Benzinga's Global Fintech Awards, Atlanta's TiE Growth and Impact Awards, and certification as a 2021 Great Place to Work.
"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."
About GroundfloorFounded in 2013, Groundfloor is an award-winning wealthtech platform that allows everyone to build wealth through real estate. Groundfloor was the first company qualified by the U.S. Securities & Exchange Commission to offer direct real estate debt investments via Regulation A for non-accredited and accredited investors alike. Today, it remains the only product offering everyone the ability to build fully customizable real estate debt portfolios for short-term, high-yield returns. Headquartered in Atlanta, Groundfloor has won numerous awards for its rapid growth and innovation including the Inc. 5000 and Deloitte's Technology Fast 500. To date, Groundfloor has raised $41.8 million in funding from a variety of sources, including venture capital and online public equity offerings. As of its most recent round of financing, the company remains over 30% customer-owned.
About MedipowerMedipower is a full-service commercial real estate firm specializing in retail real estate, primarily open-air, quality well located shopping centers, in growing high barrier-to-entry markets. The company is publicly traded on the Tel Aviv Stock Exchange under the symbol MDPR. With a broad range of experience and expertise in acquisitions, redevelopment and management of shopping centers, Medipower owns and manages about Sqf 2M. retail properties and residential developments in the United States and Canada.
MEDIA CONTACT: Hela Sheth GROUNDFLOOR [email protected]
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SOURCE Groundfloor Finance Inc.
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