Yieldstreet Raises $100M, Considers SPAC IPO & Acquisitions

Alternative Investments Platform Yieldstreet Secures $100 Million in Funding

The landscape of investment is evolving, extending beyond traditional stock market options. A growing number of startups are emerging, focused on broadening access to diverse investment opportunities. Recently, one such startup has successfully completed a substantial funding round to further its objectives.

Yieldstreet's Series C Funding

Yieldstreet, a platform facilitating alternative investments in sectors like real estate, marine/shipping, legal finance, and commercial loans – areas historically limited to institutional investors – announced on Tuesday the closing of a $100 million Series C funding round.

Mitch Caplan, formerly CEO of E*TRADE and representing Tarsadia Investments, spearheaded the investment. Additional participants included Kingfisher Capital, Top Tier Capital Partners, and Gaingels. Existing investors, such as Edison Partners, Soros Fund Management, Greenspring Associates, Raine Ventures, Greycroft, and Expansion Capital, also contributed to this round.

Company Growth and Mission

This latest funding brings Yieldstreet’s total capital raised since its 2015 founding to $278.5 million. Co-founders Milind Mehere and Michael Weisz established Yieldstreet with the core goal of democratizing investment access for non-institutional investors.

In a recent interview, CEO Mehere indicated the Series C valuation was “near unicorn” status, without disclosing the precise figure. He did reveal that Yieldstreet has successfully funded approximately $1.9 billion through its platform.

Currently, the platform boasts around 300,000 registered consumers. This represents significant growth from February 2019, when the platform had facilitated $600 million in investments from over 100,000 members. The investor base has expanded by 350% since that time.

Financial Performance and Future Plans

The company projects revenue growth exceeding 50% in 2021 compared to the previous year. To date, Yieldstreet reports having distributed nearly $950 million in principal and interest to its investors.

From January to April 2021, both investment requests and the number of new investors increased by over 250% compared to the same period in 2020. The number of new investors already surpasses the total for all of last year.

Yieldstreet is also exploring the possibility of going public through a SPAC (special purpose acquisition vehicle) within the next one to two years. CEO Mehere stated that several SPACs have expressed interest.

Potential Acquisition Strategy

“We are experiencing rapid growth, and several SPACs have reached out,” Mehere explained. “Exploring these options within the next 12 to 24 months seems viable. Public markets would provide increased visibility for consumer growth and access to capital for strategies like acquisitions.”

Yieldstreet has already completed two acquisitions: WealthFlex and Athena Art Finance, both in 2019.

Yieldstreet: Expanding Access to Alternative Investments

Yieldstreet focuses on providing individuals with opportunities to invest in asset classes beyond traditional stocks. The platform aims to democratize access to a wider range of investment options.

According to Milind Mehere, these investments are designed to produce consistent passive income. Examples include financing for properties like warehouses, multifamily residences, and distribution facilities.

Yieldstreet also facilitates investment in areas such as art, automotive loans, and equipment financing. These are typically investment avenues utilized by institutional investors.

The company’s strategy involves fractionalizing these investments, making them accessible to individual retail investors. A key characteristic of these assets is that they are backed by tangible assets and generate ongoing cash flow.

Investor Education as a Priority

To ensure transparency and informed decision-making, Yieldstreet prioritizes investor education. They provide a wealth of resources, including articles, blog posts, and infographics.

This educational content is intended to help investors fully understand the nature of their investments and the associated risks.

Strategic Growth and Expansion Plans

The recently acquired capital will be allocated to several key areas of growth. These include expanding the user base and developing innovative new investment products.

Yieldstreet also intends to explore opportunities for international expansion and consider strategic acquisitions to further its reach. Currently, the company maintains offices in New York City, Brazil, Greece, and Malta.

Addressing a Global Need

Mehere highlights that alternative investing has historically been limited to high-net-worth individuals, a situation prevalent globally. This limitation is particularly pronounced in Europe due to prevailing negative interest rates.

Consequently, there's a strong incentive for European investors to access U.S. assets. Yieldstreet is actively planning expansion into both Europe and Asia to capitalize on this demand.

Positive Outlook from Tarsadia Investments

Tarsadia Investments President, and former E*TRADE CEO, Paul Caplan, expressed confidence in Yieldstreet’s potential. He believes the company is exceptionally well-positioned for substantial revenue growth and significant scaling.

Caplan emphasized the importance of the management team, stating their vision for the future of digital investing aligns perfectly with Tarsadia’s organizational goals. He asserts that Yieldstreet is actively shaping the future of the investment landscape.