GroundFloor, the startup backed by Triangle investors which bolted for Atlanta in part because North Carolina has yet to pass crowdfunding legislation, is planning to expand again after securing $5 million in new capital.
The company, which is now based in Atlanta, announced the funding Wednesday. It has now raised $7.5 million from investors.
Leading the round is Fintech Ventures Fund, a new $100 million fund backed by tech and finance veteran entrepreneur Serguei Kouzmine. The GroundFloor investment is the first made from the new fund. Like GroundFloor, FinTech operates the fund in Atlanta.
Why make the investment?
“We’re bullish on GroundFloor because they are delivering a new, mass-market financial product to an untapped investor class,” said Serguei Kouzmine, managing director of Fintech Ventures Fund, in a statement. “The fintech market is a global phenomenon, which reaches far beyond both Silicon Valley and the United States; therefore, people should not be surprised that innovation in this market comes from many corners, and Atlanta is one of the hottest.”
GroundFloor also received further backing from its Triangle investors, including Inception Micro Angel Fund, Bruce Boehm, Michael Olander Jr, Mark Easley Jr, Trish & John Healy Jr., Jason Widen and American Underground, according to co-founder and CEO Brian Dally.
Dally says the funding will allow GroundFloor “to scale lending operations and fuel nationwide expansion. The marketplace is now operating in nine jurisdictions nationwide and growing at a rapid pace.”
The company has accelerated its operations after receiving “qualification” from the Securities and Exchange Commission for its platform, which permits non-accredited (i.e. not necessarily high net-worth) individuals from making investments.
Through a crowdfunding approach, GroundFloor has now executed 54 real estate loans and sold more than $3 million in what it calls “Recourse Obligation securities.”
The startup also plans to make additional hires as it expands geographical operations and develop more tools for investors.
“As we frequently say, the source of capital matters,” Dally said. “That’s as true in building emerging companies as it is in building more efficient, more accessible capital markets. We’re fortunate to have a resourceful investor with global perspective backing us.”