Realty Mogul, a commercial real estate crowdfunding website, has just announced a $35 million Series B investment. The round was led by Sorenson Capital with participation from Canaan Partners.
The West Los Angeles website finances debt and equity for commercial real estate investments. Financing can be arranged for deals as varied as buying a residential investment to an office building. Investors are required to contribute $10,000 at a minimum to the pool. Realty Mogul said it has financed 240 properties valued at more than $500 million since its inception in 2013.
Growing from 10 employees to 80 in the last 12 months, the company said it would use the cash infusion to continue hiring sales representatives, data scientists and portfolio analysts. Some funds will also be dedicated to opening up new sales offices in major cities and buying more real estate data, which the company uses to help investors assess and manage risk.
Most of the financing done on Realty Mogul is debt, said Chief Executive Jilliene Helman.
“Our debt business is growing more quickly from a volume perspective, but that’s not surprising,” she said. “The market size for equity is a lot smaller than it is for debt.”
Outside interest is also fast growing. Commercial real estate crowdfunding was initially financed by accredited investors, individuals with annual incomes above $200,000; however, traditional financial institutions are starting to take notice.
“One of the big trends is a lot more institutional interest in crowdfunding,” said Helman. Institutional investors, she said, have begun to put money into Realty Mogul as another investment vehicle.
Ultimately, Realty Mogul sees crowdfunding playing a larger role going forward in the commercial real estate market.
“You’ll see certain online markets get really big really quickly,” said Helman. The crowdfunding market will be worth “definitely tens of billions, if not hundreds of billions of dollars 10 years from now.”
Realty Mogul previously had raised $10.1 million in seed and Series A rounds.
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