CrowdStreet Crowdfunding Platform Closes $43M Funding Round

In a significant boost to the real estate crowdfunding market, the private equity investment platform crowd street announced on Monday that it has closed a $43 million funding round, with equity and debt capital raised being used to fund the company’s continued growth in the market.

TIAA makes an equity investment through its new TIAA Ventures, which seeks investments in promising fintech companies. In addition, major commercial real estate companies such as Cypress Stock Investments, The Dinerstein companies and Foulger–Pratt joins existing venture capital partners Grotech Companies, Rally companies, Seven Peaks Ventures and Capital Visor Green in the funding cycle.

To date, CrowdStreet has raised over $3.6 billion for over 670 commercial real estate projects across the United States since its inception in 2013.

Yet, although CrowdStreet is generally known as a real estate crowdfunding company, CEO and co-founder Torn Steen prefers to use another term to describe the Austin-based company.

Tore Steen. Photo: Crowd Street

“In terms of crowdfunding, I like to use the term online syndication, the reason being that syndication is a term we know in the commercial real estate field,” Steen said. “What we have changed is having introduced the old syndication model of raising capital through institutions, high net worth individuals and family office money, as was traditionally done. , in the online paradigm.

“In doing so, we have opened up new sources of raising capital for commercial real estate developers and operators with individual investors who have not been able to access this offline and more limited access model.”

The fintech-proptech crossover company’s goal is to enable accredited investors to invest directly in large-scale commercial real estate projects across all asset types for minimum capital amounts, as low as $25,000, a Steen said.

CrowdStreet’s founding in 2014 was spurred on by the creation of the Federal Government Employment Act (Jumpstart Our Business Startups) in 2012, Steen said.

“The JOBS Act was created and the decentralization of capital formation became possible,” he said. “Before the JOBS Act, you couldn’t advertise that you were raising capital. You couldn’t use the internet to do that. It usually takes a decade before you start to see the industry begin to adopt and transform. »

The industry indeed seems to have caught up.

“We have observed for several years that CrowdStreet evolves its fintech platform to better serve real estate project sponsors and its investment community,” said Shawn LeseChief Investment Officer and Head of Real Estate Fund Management for the Americas at Nuvean, an investment subsidiary of TIAA. “CrowdStreet’s innovation modernizes, demystifies and streamlines access to commercial real estate so that more investors have the potential to reap the benefits of investing in the asset class.”

CrowdStreet Advisors manages over $400 million in client assets across private real estate funds and separately managed accounts. In 2021, the company achieved its first billion-dollar year, when its investor community funded $1.2 billion through sole proprietorship transactions, professionally managed funds and separately managed accounts.

As of August 2022, 138 investments on the platform have been fully realized, generating an average internal rate of return of 17.5%.

Philippe Russo can be contacted at [email protected].

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