Ten years ago, the industry barely existed. Today it is a multibillion industry in the U.S., raising nearly $20 billion over the last three years. Although the majority of the top financial technology or “FinTech” startups are small business and individual lenders, blockchain and cryptocurrency companies, and data analytics firms, there are several FinTech startups that are impacting CRE.
Investors are Backing FinTech Startups
CRE pros that ignore FinTech startups do so at their own peril. There is a reason why investors are throwing huge sums of cash at these startups. The sector has witnessed a more than 15% increase since 2016, with over $27 billion invested in FinTech last year alone.
Forbes put together a list of the top 50 FinTech startups to watch this year. Real estate FinTech startups accounted for several of the startups to watch on Forbes top 50 list. From individual investor platforms to data analytics software, new FinTech tools are coming online all the time and giving CRE pros leverage in the market.
Fintech Startups to Watch
Keep in mind that while these are the most profitable FinTech startups right now, there are more commercial real estate FinTech firms out there trying to make a name. These startups are seeing the most investor and consumer dollars.
Realty Mogul is one of the top real estate investment platforms for individuals. Trying to break into the investor pool can be difficult for the average income person who typically doesn’t have the capital to make real money. Online real estate investing platforms like Realty Mogul are lowering the bar of entry so that anyone can invest in multimillion dollar commercial real estate. Founded just six years ago, Realty Mogul is backed by over 120K investors and has raised $45 million in funding – and more importantly has paid out $65 million to investors.
Perhaps the most popular and well-known FinTech startups in the commercial real estate sector are the many crowdfunding platforms coming online. Fundrise was ahead of the pack before anyone else was enabling investments in real estate portfolios for as little as $500. Last year they launched a new e-Funds platform which has already attracted 17K investors who have backed deals totaling $300 million dollars through Fundrise.
On par with Fundrise’s popularity is the San Francisco based RealtyShares crowdfunding platform. Catering to both commercial and residential real estate investors, this platform has raised over $35 million since its founding five years ago. It has also lent out more than $300 million in that time.