Michael Burry backed real estate lender PeerStreet raises $15m

By Ryan Weeks on Friday 18 November 2016

Alternative Lending

Real estate lending platform PeerStreet clinches $15m Series A led by Andreessen Horowitz.

PeerStreet, an up and coming marketplace for investing in real estate development loans, has closed a $15m Series A investment round, led by venture capital firm Andreessen Horowitz. The fundraise also attracted participation from The Kaiser Family Foundation, Rembrandt Venture Partners, Montage Ventures and a number of other investors. Alex Rampell, general partner at Andreessen Horowitz, will join PeerStreet’s board.

PeerStreet’s previous investment rounds have featured Michael Burry of Scion Asset Management (of “The Big Short” fame), Adam Nash, former CEO of Wealthfront, Toba Capital and LeFrak.

PeerStreet is a marketplace for connecting real estate developers to accredited investors. PeerStreet does not originate loans itself; instead it provides a secondary market for private lenders. The model is based on an acknowledgement by the platform that high quality real estate lending necessitates local knowledge.

The benefits for individual investors are that they’re able to back lenders with established track records. And for PeerStreet itself, the platform has a chance to scale more rapidly than its competitors by drawing on existing sources of deal flow. The platform blasted through the $100m mark in “funded loan investments” in early August, after formally launching in October 2015. The firm has now funded over $165m in loans, and claims to have returned more than $50m to its investors, with “zero losses”.

"PeerStreet is one of the fastest growing marketplace lenders we've seen, scaling to $165 million in originated loans in a little over a year, with great returns against a secured asset,” said newly appointed board member Rampell. “They have a unique distribution model that allows them to leverage existing lending networks to lower loss rates, and grow without direct marketing."

PeerStreet CEO and co-founder Brew Johnson (pictured above) said that the firm’s latest funding round would help it to further execute its goal of “building a world class investment platform for real estate debt”.

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