concreteLtd., a company that wants to open up real estate investing to a broader group of people, today announced that it has closed $6 million in a seed funding round led by Matrix Partners.
Hyphen Capital also participated in the round, in addition to individual investors such as Betterment founder and CEO John Stein; Andy Liu, Partner at Unlock Venture Partners; and investor and advisor Ben Elowitz. Concreit made the capital a . picked on $22.5 million post-money valuation.
The Seattle-based startup also launched its app today, which it claims will allow “anyone” to invest as little as $1 in the global private real estate market.
This is a big claim. But first let’s start with some background.
Concreit isn’t the first time co-founders Sean Hsieh and Jordan Levy have teamed up. The pair previously founded and bootstrapped VoIP communications platform Floorout. Selling it to West Corp. in 2018. Upon the sale of that company, Hsieh and Levy set out to create a company that, in their words, “could help everyday people become more financially secure.”
A second generation immigrant, Hsieh worked at his family’s restaurant, where he shared the dream of achieving financial independence through real estate. Similarly, Levy says he grew up watching his parents build a small construction business from scratch. He was intrigued by the idea of passive income through single-family rental homes, but became disillusioned with the overhead, risk, and hassle of managing his own single-family rental investments.
So the two worked together to design a mobile-first offering that could enable small investors to benefit from real estate “without the burden of having to make repairs at 2 a.m. on Saturdays.” Enter concrete.
The company claims that most investors today can open a concrete account and make their first investment on their mobile device within minutes. The company’s free mobile app allows consumers to invest as little as $1 in a fund managed by a team of investment professionals. Withdrawals can be requested at any time through the App and sent upon approval.
The platform features weekly accrued payments, automatic investments, and on-demand withdrawals, while combining weekly accrued payments.
After selling Florout, Hsieh said, “He saw an opportunity to earn a great APR through private real estate investing, while achieving low correlation with the traditional public stock or bond markets,” Hsieh said. “But they were only for the already wealthy or required multi-year commitments of capital. Concreit gives everyone access to a real estate portfolio and the ability to access withdrawals when needed.
Simply put, the startup wants to make it easier for anyone – not just the wealthy – to invest in real estate.
Concreit, Hsieh said, gives “regular people” the ability to access real estate strategies typically used by large hedge funds and private equity.
“We are seeing an increase in retail demand for options and other ways to invest outside of the public markets and the crypto space for those who value diversification,” Hsieh told . “Most of the other competitors are focused on the marketing and selling of securities, but we knew that to be an innovator in this area, we had to provide a truly unique experience for our investors.
Concreit’s platform is designed for a more connected investment experience.
“We already knew that digital natives deserve an entirely new real estate investment experience and that it should be 100x better than taking traditional real estate investment opportunities and presenting them digitally,” Hsieh said.
So on the platform side, Concreit has built a cloud-based proprietary securities accounting engine that allows the company to process fractional calculations and pull in a lot of mutual fund practices, making them more labor-intensive than the “more labor-intensive” private equity markets. side applies. Focus on real estate.
“We’ve done a lot of the cloud-architectural work that we pioneered in the telecommunications space and applied it toward a back-office accounting solution that gives us a competitive edge around what we offer to our investors,” said Hsieh . “It provides the ability to run accounting at a higher frequency, thus enabling us to run weekly dividends, process partial redemptions and ultimately a more real-time experience for our users.”
Concrete’s first private REIT fund focused on passive income, includes low-risk fixed-income Private market residential and commercial real estate first-lien mortgages. fund, which The company is said to have an annualized return of 5.47%, managed by a team of industry professionals. The startup has added over 18,000 customers to its platform since it was qualified by the SEC (a little over a year ago), and doubled its user base in the month of August.
“OYour current users can invest with any dollar amount, no lock-up, weekly payments, and an experience that is as easy and familiar as a savings account,” said Hsieh.
matrix Dana Stalder, who joined Concreit’s board as part of the financing, believe that Concreit has leveled the playing field by making real estate investing more accessible.
“What Concrete has created is incredibly difficult to do from both a technical and regulatory standpoint,” He told . “Alternative asset classes, in particular, have been notoriously closed to the average consumer, leaving high-yielding returns especially for wealthy investors.”