RESEARCH TRIANGLE PARK – Brian Dally and Nick Bhargava launched real estate investment platform Groundfloor in the Triangle five years ago, moved to Georgia where the emergence of crowdfunding outpaced that in North Carolina, and since then has been on a steady growth path. New $4.2 million in funding announced Thursday is proof of investors’ confidence in allowing anyone, not just those well off, invest in real estate.
But the availability of crowdfunding now in North Carolina won’t bring the firm’s HQ back to its birthplace.
“The Triangle will always be important to us,” Dally tells WRAL TechWire. “We see strong market opportunities throughout North Carolina as we continue to scale, but we don’t have plans to relocate our headquarters back to the area.”
In fact, Groundfloor disclosed today it is relocating to new office space in Atlanta with its employee headcount having grown to 45.
The new funding is already being put to use, Dally explains.
“We’re already putting the capital to work by:
1. Hiring experienced loan originators
2. Doubling our software development team
3. Bringing new investment products into the mix
“Investing in these areas will provide more opportunity and choice for our investors to diversify within their Groundfloor portfolio.”
Groundfloor is rising along with the growing tide of interest in crowdfunding across the country, according to Dally. But two other factors set Groundfloor apart, he adds.
Brian Dally, center, and Nick Bhargava, left, talk with WRAL TechWire Editor Rick Smith about Groundfloor.
“We were the very first platform to open to non-accredited investors so we’ve introduced many new people to real estate investing,” he explains. “Being the first to market in this category helped drive growth. Today, 98% of our investors are non-accredited, and we’re very proud of this!”
In fact, he says 98 percent of the investors are non-accredited, or people with a net worth of less than $1 million or making less than $200,000 a year.
Secondly, Dally notes: “We’ve built a strong offering and user experience for both borrowers and investors during the last 5+ years. It’s a simple platform that gives people the ability to control their own investment decisions.”
The latest funding lifts Groundfloor’s investment total to $13.8 million with 2,304 investors putting $6.2 million into the company over the past 20 months.
Revenue from investments in real estate deals grew 64 percent year-over-year, according to Thursday’s announcement. For the 12 months ending June 30, revenue rose to nearly $2 million.
Groundfloor also says it has 50,000 registered users on its platform with one fifth of that coming in the past year.
The company says it now has originated more than 550 loans topping $75 million in value.
Investors are seeing an annualized rate of return of more than 11 percent.
“We launched Groundfloor five years ago to level the playing field in capital markets for the benefit of individual investors and independent real estate entrepreneurs,” said Dally in the funding announcement. “This new round of operating capital is already accelerating our growth by enabling us to continue reaching more borrowers and broadening investors’ opportunities to diversify.”
