Portland-based CrowdStreet announced today that it has raised an $800,000 seed round to fuel development of the company’s commercial crowdfunding real estate marketplace.
The startup, which launched in March 2013, is an online platform that connects credited investors to real estate developers or operators looking to raise private capital. Similar to something like Kickstarter, CrowdStreet essentially acts as the middleman and creates connections between the two sides that may have previously been restricted.
“Investors have traditionally never seen a lot of these opportunities to invest because they either had to know the developer, and if they did, it was confined to geographic region,” CEO Tore Steen told GeekWire. “Now, by bringing it online and standardizing the format by which these opportunities are offered, you can give investors across the U.S. access to these deals.”
CrowdStreet allows investors to sort through different real estate opportunities, whether it’s in the senior housing industry or a fast-growing urban development. Each project has been thoroughly vetted before being posted to the platform.
“It’s definitely not a Craigslist,” Steen said.
CrowdStreet currently has four listings on the site with a combined property value of $115 million. The company closed its first project a few months ago, with investors on CrowdStreet contributing $1.6 million to a $13 million project.
The CEO said that while there are other companies also trying to establish a crowdfunding marketplace, competition is bound to happen in a $250 billion commercial real estate market. CrowdStreet, which makes money by charging developers a posting fee, tries to separate itself with its listings.
“One differentiating factor for us is the quality of the types of commercial real estate projects we list on the platform,” Steen noted.
Steen originally started CrowdStreet with fellow co-founder Darren Powderly in Bend, Ore., after the passage of the JOBS Act made it easier to crowdfund. The company went through the Founders Pad incubator in Bend before moving its operations to Portland, where it now employs six — a number that should double within the year thanks to the fresh cash.
Investors in the seed round include Seven Peaks Ventures and Green Visor Capital. Also participating was Portland Seed Fund.