Growth equity firm Edison Partners announced Wednesday leading an $11 million financing round in Fund That Flip, a New York City-based company launched in 2014 as an online financing platform for the fix-and-flip residential real estate market.
The platform plans to expand to additional residential loan products and other new ways for investors to participate. Princeton-based Edison Partners said Fund That Flip will use the funds for sales and marketing, developing internal capital markets capability, and technology and product acceleration.
The online real estate finance market is expected to grow to $300 billion by 2025, according to Edison Partners, as redevelopers finance renovations of existing properties to meet the needs of modern buyers and resell homes at an attainable price point.
The fix-and-flip market is largely untapped and fragmented … Fund That Flip is well-positioned as an early market mover in tech-enabled real estate finance.
– Jennifer Lee, vice president, Edison Partners
Fund That Flip lets redevelopers finance real estate projects through a network of accredited and institutional investors who can purchase fractional shares of the loan and earn an 8 percent to 9 percent annualized yield.
“The fix-and-flip market is largely untapped and fragmented, with the largest originator underwriting less than 3 percent of the market volume. Fund That Flip is well-positioned as an early market mover in tech-enabled real estate finance,” said Jennifer Lee, vice president at Edison Partners, who led the investment and will join the board of directors. “The company’s capital efficiency, compelling economics and strong cash flow profile are impressive, and we’re confident that CEO Matt Rodak and the management team can continue to rapidly grow originations while profitably scaling their lender base.”
Fund That Flip provides funding in as few as seven business days over an average of eight months and underwrites loans based on the characteristics of the real estate.
Edison Partners has financed and guided over 220 private companies, including more than 46 fintech companies. The firm was recognized for two years in a row as Fintech Equity Investor of the Year by LendIt Fintech and named to the 2018 Institutional Investor’s Fintech Finance 40 power ranking.