Fundrise

Last updated
Fundrise, LLC.
Industry Financial services
Financial technology
Real Estate Investing
Real estate investment trust
Founded2010;14 years ago (2010)
FoundersBen Miller
Dan Miller
Kenneth Shin
Brandon Jenkins
Headquarters
Washington, D.C.
,
U.S.
Key people
Ben Miller, Co-Founder and CEO
Brandon Jenkins, COO [1]
Alison Staloch, CFO [2]
Total assets $5.1 billion (2021 [3] )
Number of employees
123 [4]  (2020)
Parent Rise Companies Corp. [5]
Website fundrise.com

Fundrise is a Washington, D.C.-based financial technology company founded in 2010 that operates an online investment platform. [6] Fundrise has been labeled as the first company to successfully crowdfund investment into the real estate market. [7]

Contents

As of December 31,2019, Fundrise had originated approximately $1.1 billion in both equity and debt investments deployed across approximately $4.9 billion of real estate property. [8]

History

Fundrise was founded in 2010 by brothers Ben and Dan Miller and launched in 2012 before the passing of the JOBS Act, which enacted securities regulation to streamline the process of equity crowdfunding in the United States. [6] Their father, Herb Miller of Western Development Corp., developed 20 million square feet of real estate based in Washington, D.C. Ben Miller worked as President of Western Development Corp. and Managing Partner of WestMill Capital Partners prior to Fundrise. Prior to Fundrise, Dan Miller worked for Western Development Corp. and also as Managing Partner of WestMill Capital Partners. The brothers founded the company with the idea to allow residents in the D.C. area to invest in real estate development projects they were building. [5] Fundrise's first project, Maketto, in the H Street NE Corridor in Washington D.C. raised $325,000 from 175 investors, where any resident of D.C. or Virginia could invest for as little as $100, making it the first crowdfunded real estate project in the United States. [5] [7]

Early growth

After the initial project, Fundrise was contacted by real estate companies looking to use the Fundrise platform to raise capital. [5] Soon thereafter, the company expanded its platform to allow conventional real estate investments from commercial developers across the United States. [5]

By May 2014 the company reported to have facilitated $15 million in investments involving 1,000+ investors. [6] One of Fundrise's most publicized investments came in January 2015 when it began offering bonds for the construction of 3 World Trade Center, the location of the third tallest tower at the site of the World Trade Center in lower Manhattan. [9] The initial offering was for $2 million of the $5 million worth of bonds purchased by Fundrise for the financing of the $1 billion project. Bonds were offered for $5,000 each with a 5% tax-free gross annual return for five years. [9] [10]

Fundrise also raised more capital in its first-round of Series A investment than any other crowdfunding company, totaling $38 million. [7] Funding was led by Chinese social networking company Renren who invested $31 million of the total $38 million. [11] Additional Series A investors include Guggenheim Partners, Justin Elghanayan of Rockrose Development Corporation, and James Ratner of Forest City Enterprises. [5] By February 2015, Fundrise had commitments from six institutional investors for an additional $100 million in investment into the company's real estate offerings. [12] In October 2015, co-founder and president Daniel Miller left the company.

In February 2016, Fundrise terminated its senior accountant for allegedly attempting to extort over $1 million from the enterprise over a claim that "the company acted inappropriately concerning two real estate deals." The accountant denied the allegations of extortion and claimed that the termination was retaliation for reporting "serious fraudulant behavior." [13] The company denied the claims and hired an outside audit firm to conduct an investigation into the allegations, which ultimately concluded there was no reasonable basis to the allegations. [14] [15] [16] [17]

eREIT launch

On December 3, 2015, Fundrise launched the Fundrise Real Estate Investment Trust, the world's first online real estate investment trust or "eREIT" with an initial offering of $50 million pursuant to Regulation A+. [18]

The Fundrise eREIT offering provides prospective investors with the opportunity to invest in an intended portfolio of properties across the United States for a minimum of $1,000. The aim of the eREIT is to use new technology to give both accredited and unaccredited investors the option to invest in U.S. real estate. This financial offering was made possible by the expansion of Regulation A under the JOBS Act. [19]

The company subsequently opened a second eREIT, the Fundrise Equity REIT, in February 2016. [14]

In December 2016, the Fundrise Income eREIT was the first company to raise $50 million, the maximum amount allowed under Regulation A. Later in December 2016, the Fundrise Growth eREIT became the second ever issuer to raise $50 million pursuant to Regulation A. [20]

eFund launch

In June 2017, Fundrise announced the eFund, a diversified portfolio of for-sale housing in major U.S. cities. [21] The first eFund was the Los Angeles eFund, with an initial offering of $50 million under Regulation A+. [22] In conjunction with the eFund launch, Fundrise introduced a goal-based investing and an advisory service. [23]

Amazon HQ2

In 2018, Fundrise announced that it had acquired thirty residential properties in the Washington, D.C. area in anticipation of Amazon's HQ2 announcement. Fundrise is establishing the HQ2 DC eFund, to invest as much as $50M in residential properties throughout Washington, D.C. [24]

2021

In 2021, Fundrise received $300 million in credit from Goldman Sachs to invest in developing single family homes in the Sun Belt. [25] [26]

Awards

Fundrise was selected for the Forbes Fintech 50 list in 2015, 2016, 2017, and 2019. [27] [28] [29] [30] In 2018, Fundrise placed position 35 overall and position 1 in the financial services industry on the Inc. 5,000 list. [31]

See also

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References

  1. ↑ "Exclusive Q&A with Fundrise COO: EREITs, Explained".
  2. ↑ "Former SEC chief accountant joins real estate investment platform as CFO".
  3. ↑ "Can an App Renovate a Neighborhood?". Bloomberg Business.
  4. ↑ "Fundrise iPO: First half of 2020 investor update". fundrise.com. Retrieved 2024-03-30.
  5. 1 2 3 4 5 6 Gage, Deborah (26 September 2015). "Renren-Backed Fundrise Bulks Up In Real Estate Crowdfunding Sector". The Wall Street Journal. Retrieved 23 February 2015.
  6. 1 2 3 Cortese, Amy (27 May 2014). "Fundrise, a Crowdfunding Website, Raises $31 Million". The New York Times. Retrieved 23 February 2015.
  7. 1 2 3 Alois, JD (26 September 2014). "Fundrise Adds Big Name Investors Including Ratner, Elghanayan & Guggenheim: Funding Now at $38 Million". Crowdfund Insider. Retrieved 23 February 2015.
  8. ↑ "Rise Companies Corp - PART II – INFORMATION REQUIRED IN OFFERING CIRCULAR - As filed with the Securities and Exchange Commission on January 31, 2020". Securities and Exchange Commission. January 31, 2020. Retrieved April 24, 2020.
  9. 1 2 Clarke, Katherine (27 January 2015). "Investors can snag a stake in 3 World Trade Center for just $5,000 with new crowd funding initiative". New York Daily News. Retrieved 24 February 2015.
  10. ↑ "Crowdfunder Fundrise marketing 3 WTC bonds". The Real Deal. 27 January 2015. Retrieved 24 February 2015.
  11. ↑ Schwartz, Eric Hal (28 May 2014). "Chinese Firm Leads $31 Million Investment in Fundrise". Streetwise. Retrieved 23 February 2015.
  12. ↑ Alois, JD (6 February 2015). "Six Institutional Funds Commit Over $100 Million to Fundrise". Crowdfund Insider. Retrieved 24 February 2015.
  13. ↑ O'Connell, Jonathan (7 Mar 2016). "Fundrise CFO says he was ousted after alerting crowdfunding company of 'serious fraudulent behavior'". Washington Post. Retrieved 2016-08-03.
  14. 1 2 "FUNDRISE REAL ESTATE INVESTMENT TRUST, LLC - FORM 1-K". UNITED STATES SECURITIES AND EXCHANGE COMMISSION. April 26, 2016.
  15. ↑ Sernovitz, Daniel. "Fundrise chief financial officer terminated". Washington Business Journal. American City Business Journals. Retrieved 2016-02-19.
  16. ↑ "United States Securities and Exchange Commission Pursuant Regulation A of the Securities Act of 1933". SEC.gov. Securities and Exchange Commission. February 9, 2016. Retrieved 23 February 2016.
  17. ↑ "Fundrise Equity REIT Offering Circular" (PDF).
  18. ↑ Ho, Ky Trang. "How To Play Billion-Dollar Real Estate Deals With Just $1,000". Forbes. Archived from the original on December 5, 2015. Retrieved 2017-06-09.
  19. ↑ "Fundrise Lets Common Folk Invest In Posh Real Estate Ventures". Wired.
  20. ↑ "Rise Companies Offering Circular".
  21. ↑ "Home Sweet Investment: Fundrise Introduces New Way For Millennials To Endow Their Future Houses". www.forbes.com. Retrieved 2017-11-30.
  22. ↑ "Fundrise Officially Announces New eFunds | Crowdfund Insider". Crowdfund Insider. 2017-07-20. Retrieved 2017-11-30.
  23. ↑ "Fundrise 2.0: Online Real Estate Investment Platform Revamps Service with First Ever Robo-Advisor for Real Estate | Crowdfund Insider". Crowdfund Insider. 2017-06-13. Retrieved 2017-11-30.
  24. ↑ "Fundrise Launches Amazon HQ2 Fund After Speculatively Buying 30 D.C.-Area Properties". www.bisnow.com. Retrieved 2019-03-04.
  25. ↑ "Fundrise scores Goldman backing to expand single-family rental market". TheRealDeal. 4 June 2021.
  26. ↑ "Goldman Sachs Backs Single-Family Rental Fund for Small Investors". Wall Street Journal.
  27. ↑ "Fintech 50: The Future Of Your Money". Forbes. Retrieved 7 February 2018.
  28. ↑ Novack, Janet; Schifrin, Matt. "The Forbes Fintech 50 For 2016". Forbes. Retrieved 7 February 2018.
  29. ↑ Sharf, Samantha. "The Forbes Fintech 50 For 2018". Forbes. Retrieved 20 February 2018.
  30. ↑ "The Forbes Fintech 50 For 2019". Forbes. Archived from the original on February 5, 2019. Retrieved 2019-02-04.
  31. ↑ "Inc. 5000 2018: The Complete Rankings". Inc.com. Retrieved 2018-10-17.

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