Venture capital firm Andreessen Horowitz has led a $15 million investment in PeerStreet, a financial technology startup that gives individual investors access to real estate-backed loans online.
The investment comes just over a year from the launch of PeerStreet’s platform. It has since originated more than $165 million in loans.
Founded by former Google executive Brett Crosby and real estate attorney Brew Johnson, PeerStreet allows accredited investors to invest as little as $1,000 in high-yield real estate loans through its website.
Unlike many other marketplace lenders, the startup sources loans by tapping into existing networks of local lenders, a process that it believes helps better assess credit risk and reduce customer acquisition costs.
Andreessen Horowitz’s Rampell said the company stood out among competitors because of its fast growth and distribution model. “Most companies that are lending to consumers spend all the money in customer acquisition and it is very hard to get a profit,” he said.
The investment comes in the wake of a period of turbulence for U.S. marketplace lenders, driven in part by softer institutional demand and doubts over the model’s sustainability in a rising interest rate environment.
Fortune (17 Nov)
