Edison Partners, the growth equity firm, today announced leading an $11 million financing round in Fund That Flip, an online financing platform for the fix-and-flip residential real estate market. The company will use the funds for sales and marketing, developing an internal capital markets capability, and technology and product acceleration.
With a low supply of new single-family homes, affordability is a concern for many home buyers in the US. The online real estate finance market is expected to grow to $300 billion by 2025, a 79% compound annual growth rate, as redevelopers finance renovations of existing properties to meet the needs of modern buyers and resell the homes at an attainable price point. Fund That Flip lets redevelopers fund their real estate projects through a network of accredited and institutional investors who can purchase fractional shares of the loan and earn an 8% to 9% annualized yield. The platform is designed for the residential fix-and-flip market, with plans for expansion to additional residential loan products and other new ways for investors to participate.
“The fix-and-flip market is largely untapped and fragmented, with the largest originator underwriting less than 3% 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.” Lee was recently recognized as a finalist for Finovate's Fintech Woman of the Year and was also named to WSJ Pro Private Equity's Women to Watch list in 2018.
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. The New York City-based company, which launched in 2014, has realized rapid growth, doubling its revenue, loan origination volume and customer base each year for the last three years.
“We’re building the predominant real estate investment marketplace for investors looking for attractive returns and redevelopers who need capital to so they can focus on what they do best—finding and rehabilitating homes,” said Matt Rodak, CEO and founder of Fund That Flip. “We’re thrilled to work with Edison Partners and appreciate the deep operational expertise they bring to our team. With this investment, we can expand into new territories and capture more market share in the trillion-dollar residential real estate finance industry while creating profitable, exponential growth.”
Edison Partners has financed and guided more than 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.
Noteworthy exits include Billtrust, EdgeTrade, FolioDynamix, GAIN Capital, Liberty Tax, OptionsCity and Princeton Financial. Current financial technology investments include: BFS Capital, Bento for Business, Bipsync, Clearpool Group, ComplySci, GAN Integrity, Giant Oak, MoneyLion, Predata, Scivantage, Solovis, YieldStreet, and Zelis.
About Fund That Flip
Fund That Flip is the leading online platform for investing in short-term residential real estate debt. Their award-winning fintech platform focuses on raising capital for the residential rehab loan market and passive wealth generation for peer-to-peer lenders. With offices in New York City and Cleveland, Fund That Flip helps restore communities across the United States through its network of experienced, dedicated redevelopers backed by a diverse base of institutional and individual investors. Fund That Flip ranked on the 2019 Inc. 500 list of the nation’s fastest-growing private companies. Additional information can be found at http://www.fundthatflip.com.
About Edison Partners
For more than 30 years, Edison Partners has been helping CEOs and their executive teams grow and scale successful companies. The firm’s investment team brings extensive investing and operating experience to each investment. Through a unique combination of growth capital and the Edison Edge platform, consisting of operating centers of excellence, the Edison Director Network, and executive education programs, Edison employs a truly integrated approach to accelerating growth and creating value for businesses. A team of experts in financial technology, healthcare IT and enterprise solution sectors, Edison targets high-growth companies with $5 to $25 million in revenue; investments also include buyouts, recapitalizations, spinouts and secondary stock purchases.
