Concreit Raises $6M to Democratize Private Real Estate Investment

Concreit Secures $6 Million Seed Funding to Democratize Real Estate Investment

Concreit, a firm dedicated to broadening access to real estate investing, has announced the successful completion of a $6 million seed funding round. This round was spearheaded by Matrix Partners.

Hyphen Capital also contributed to the funding, alongside individual investors including Jon Stein, founder of Betterment; Andy Liu, a partner at Unlock Venture Partners; and Ben Elowitz, an investor and advisor.

App Launch and Valuation

The Seattle-based startup simultaneously launched its mobile application. This app purportedly enables individuals to invest in the global private real estate market with investments starting as low as $1.

The company achieved a $22.5 million post-money valuation during this capital raise.

Founders' Background and Vision

Sean Hsieh and Jordan Levy, the co-founders of Concreit, previously collaborated on VoIP communications platform Flowroute. They successfully bootstrapped and later sold Flowroute to West Corp. in 2018.

Following the sale, Hsieh and Levy aimed to establish a company focused on enhancing the financial security of everyday individuals.

Hsieh’s upbringing, witnessing his family’s aspirations for financial freedom through real estate, fueled his passion. Levy, similarly, observed his parents building a construction business and recognized the potential of passive income from rental properties, but was wary of the associated complexities.

This led them to develop a mobile-first platform designed to allow smaller investors to benefit from real estate investments without the typical burdens of property management.

Platform Features and Accessibility

Concreit’s app allows users to open an account and make their initial investment within minutes. Investors can allocate as little as $1 to a fund overseen by a team of investment professionals.

Withdrawal requests can be submitted through the app and are subject to approval. The platform supports weekly earned payouts, automated investing, and on-demand withdrawals, with payouts compounded weekly.

Hsieh highlighted the opportunity to achieve attractive returns through private real estate investing, while maintaining less correlation with public stock and bond markets. He emphasized that Concreit extends this access to everyone, offering a real estate portfolio and withdrawal flexibility.

Democratizing Real Estate Strategies

The startup’s core objective is to simplify real estate investment for all, not just affluent individuals.

Concreit provides access to real estate strategies traditionally employed by large hedge funds and private equity firms.

Hsieh noted a growing retail interest in alternative investments, seeking diversification beyond public markets and cryptocurrencies.

He distinguished Concreit by focusing on delivering a unique investor experience, rather than solely marketing securities.

Technological Innovation

Concreit’s platform is engineered for a seamless and connected investment experience.

The company has developed a cloud-based, proprietary securities accounting engine. This engine facilitates fractional calculations and incorporates practices from mutual funds, adapting them to the private equity market, specifically real estate.

Hsieh explained that their expertise in cloud architecture, honed in the telecommunications sector, has been applied to create a back-office accounting solution that provides a competitive advantage.

This advanced accounting system enables higher-frequency processing, supporting weekly dividends, fractional redemptions, and a more real-time user experience.

Fund Performance and User Growth

Concreit’s inaugural private REIT fund, concentrating on passive income, comprises lower-risk, fixed-income private market residential and commercial real estate first-lien mortgages.

The fund currently boasts an annualized return of 5.47% and is managed by a team of experienced industry professionals.

Since receiving SEC qualification (just over a year ago), the platform has attracted over 18,000 customers and experienced a doubling of its user base in August.

Hsieh emphasized the platform’s ease of use, allowing investments of any amount, without lock-ups, with weekly payouts, and a user experience akin to a savings account.

Investor Confidence

Dana Stalder of Matrix Partners, who joined Concreit’s board as part of the funding, believes Concreit has created a more equitable landscape for real estate investing.

Stalder stated that Concreit’s technology and regulatory compliance are particularly impressive. He noted that alternative asset classes have historically been inaccessible to most consumers, limiting high-yield returns to wealthier investors.

He believes Concreit is changing this dynamic.