GroundFloor, a real estate investment platform based in Atlanta, announced Thursday it has raised $4.2 million in crowdfunding.
This recent round has brought GroundFloor's total capital raised to $13.8 million. Meanwhile, the company reports it has reached a 64 percent increase in year-over-year-revenue.
"I think at $4.2 million our equity raise puts us in the top 5 percent of companies that have ever done an equity raise this way," Brian Dally, co-founder and CEO, said. "It’s a pretty successful campaign for us, there’s only a handful that are done at that scale."
Dally said the startup chose to apply crowdfunding over the traditional venture capital route because of the company's goals and mission, which is to open private capital markets to individual investors.
"Any entrepreneur that raised venture capital, there are pluses and minuses," he said. "The pluses are, if you get the right VC, you also bring on board some some expertise...On the downside, venture capital can be very expensive, very time consuming to raise, and comes with a lot of other limitations that have been pretty well documented. We realized for the amount of capital we wanted to raise, that going this route was very consistent with our mission."
Several of the investors who use GroundFloor's platform, which allows anyone to invest in the real estate market, would often ask if they could additionally invest in the startup, Dally said. Given the trend of startup investing with the ABC show "Shark Tank" and the popularity of crowdfunding, he said there are a lot of early adopters of the idea, including GroundFloor customers.
"Now, our customers own 14% of the company," he said. "We’re really proud of that. We think that’s very consistent with what we’re trying to do with our mission."
The funding will be used for hiring positions, growing the platform and offering new products to customers, Dally said. The software development team has more than doubled since GroundFloor began to raise the funding. The company will continue to hire positions for sales, software developing and marketing.
"The number one feature request that we hear from customers is…we want more product," he said. "We’re using the capital to sell more product and we’re on track to double the amount of product we’ve been able to offer to our investors."
In addition to the funding raised, GroundFloor will also celebrate its new move to a 7,746 sq. ft. office in the Bank of American Plaza. The startup is moving from the ATDC state incubator after graduating from its signature program last spring.
"We really like being across the street from MARTA, really close to I-75 and still close to Midtown and Georgia Tech," he said. "It's a really good spot. I think we're going to love it."
