| GROUNDFLOOR Finance Inc. | |
| Industry: | Crowdfunded real estate investing |
| Founded: | 2013 |
| Hq Location: | Bank of America Plaza |
| Hq Location City: | Atlanta, Georgia |
| Hq Location Country: | U.S.A. |
| Services: | Real estate peer-to-peer lending |
| Num Employees: | 102 |
| Num Employees Year: | 2022 |
Groundfloor is an American real estate investing and lending marketplace. It was the first real estate crowdfunding company to achieve SEC qualification utilizing Regulation A+ since the regulation became operable through the JOBS Act.
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.
Groundfloor was founded in Raleigh, North Carolina, in February 2013 by Brian Dally (who launched Republic Wireless) and Nick Bhargava (contributor to the JOBS Act).[1] In March 2014, the company raised $300,000 from angel investors in the region.[2] After raising $1 million in seed funding, Groundfloor moved its headquarters to Atlanta because of the Invest Georgia Exemption (IGE)[3] which allows state residents to invest in crowdfunded projects regardless of their investor accreditation status.[4] [5]
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 JOBS Act.[6] [7] The company subsequently opened investing in California, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington, Georgia and the District of Columbia in the fall of 2015.[8] By late October, Groundfloor sold out every loan originally listed.[9] 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, 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.[10]
In 2017, Groundfloor originated $30 million in loans.[11] By October 2018, the company had loaned more than $70 million across 500 properties in the United States,[12] one third of which are in Atlanta.[13] Following $4.2 million secured from 2304 investors during the 2017-18 campaign, as of October 2018 the company had fundraised $13.8 million.[14]
Groundfloor was purposely built to serve self-directed investors instead of institutional investors. 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.[6]
Groundfloor targets residential-development projects.[15] 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.[16]
In October 2015, Groundfloor introduced two new tools that expand peer-to-peer lending of real estate: quick comparison of loans and in-depth analysis of loan grading factors.