Will Bigger Players Jump on Ad, Tech Bandwagon?

NEW YORK CITY—Recently, Realty Mogul, based in Beverly Hills, CA, revealed its $9-million series A round led by VC firm Canaan Partners. On the same day, San Francisco-based RealCrowd announced a $1.6 million Series Seed round from a group of angel investors. Both of these companies operate online deal syndicates: they find deals and syndicate a portion of the equity from their investor pool (aka “users”), in exchange for a portion of the deal economics. Realty Mogul and RealCrowd are just two of the many companies syndicating real estate deals online.

In less than a year, all these platforms combined have syndicated upwards of $50 million (by my estimates). What’s interesting is not the sum (relatively low in real estate terms), but the rapid growth of these startup firms and the validation of their business model. These companies are quickly paving the road for a national non-institutional market for real estate investments. That’s a big deal for everyone, especially for middle market operators, who stand to gain the most from the recent relaxation of advertising rules by the SEC (JOBS Act), as well as from the scalable technologies that make it possible for them to replicate what Realty Mogul and RealCrowd are doing.