An investment marketplace has gotten an investment of its own.
PeerStreet, a marketplace for investing in real estate-backed loans, has closed a $15 million Series A led by Silicon Valley venture capital firm Andreessen Horowitz.
Alex Rampell, a general partner at Andreessen Horowitz who led the investment, will take a seat on PeerStreet’s board.
Launched in October 2015, the Manhattan Beach, California startup connects investors with real estate-backed loans — a high-quality asset class that’s historically been difficult to access — and makes investing in them as easy as buying stocks.
Co-founders Brew Johnson and Brett Crosby described in detail how PeerStreet works in an interview upon the platform’s launch. In short, the company focuses on hard-money lending — short-term (typically 12 months), high-interest-rate (6 percent to 12 percent) loans to real-estate entrepreneurs who buy homes to fix them up and then sell them or rent them out. These loans are relatively safe investments because they’re backed by real estate.
Over the past year, the company has onboarded a couple thousand investors and funded more than $165 million in loan investments, returning more than $50 million to investors with zero losses.
“PeerStreet is one of the fastest-growing marketplace lenders we’ve seen,” Rampell said in a statement. “They have a unique distribution model that allows them to leverage existing lending networks to lower loss rates, and grow without direct marketing.”
PeerStreet has also expanded its national footprint, working with more than 50 lenders and offering investments across half the country.
The company will use its Series A to “further execute on our goal of building a world-class investment platform for real estate debt,” said co-founder and CEO Brew Johnson.
Co-founder and COO Brett Crosby called the round “another strong signal to our customers, partners and lenders that our business is on the right trajectory to fulfill our mission of connecting investors more directly with loans. Our approach benefits the entire ecosystem by providing more transparency, access and control to mortgage finance.”
The Kaiser Family Foundation, Rembrandt Venture Partners, Montage Ventures and others participated in the Series A. Previously PeerStreet raised a $6.1 million seed round for $21.1 million in total funding.