It’s no secret that we take company culture seriously at PeerStreet, but it isn’t every day we get a four-page spread highlighting our efforts to create an inclusive, diverse, productive, and happy culture. Yet that’s exactly what happened in Geraci’s March 2020 issue with its “Inspiring Excellence Through Shared Purpose" article.
Take a look at what we’re doing, and what some of our employees have to say!
PeerStreet is excited to announce that we’ve promoted Ellen Coleman to Chief Financial Officer. Ellen joined the company a year ago as EVP of Finance. As CFO, she’ll oversee a variety of different teams, including finance, accounting, treasury, servicing, and capital markets, and will focus on bringing more automation to various financial systems for PeerStreet and our users.
Ellen brings more than 15 years of experience in corporate treasury within the mortgage industry, and made an immediate and important impact upon joining PeerStreet. Before Ellen started, much of our tech investments were customer-focused, building intuitive and comprehensive platforms and new products. Ellen’s hire helped bring a renewed focus on internal technology innovation, transforming many of PeerStreet’s more manual financial operations processes into automated ones for greater efficiency and accuracy.
This work has included launching APIs for our purchasing and wire processes, saving time for PeerStreet and our clients alike. She spearheaded automating settlement statements to further improve loan purchasing across the board. She also played an instrumental role in securing $60 million in Series C funding and $4.25 billion in capital commitments in the latter half of 2019.
“It’s hard to overstate the impact Ellen has had in a relatively short time here. She quickly became a respected leader throughout the company and we are lucky to have her leading our finance efforts,” said Brew Johnson, co-founder and CEO of PeerStreet. “We’re looking to build upon the momentum she’s already brought to our financial operations, bringing more automation and innovation to every touchpoint of our business.”
Ellen came to PeerStreet with a strong track record in both treasury operations and debt capital raising, demonstrating proven success with building finance and treasury teams, cash management and wire operations, and establishing new processes to support business objectives, particularly for enabling growth. Her experience will continue to be invaluable for PeerStreet as we scale and expand both the overall platform as well as our finance and credit operations.
“It’s been an incredibly rewarding year at PeerStreet, from marquee achievements like our Series C raise to the less sexy, behind-the-scenes improvements to financial systems, modeling, and reporting,” Ellen said. “I continue to be inspired by the teams and individuals I get to work with on a daily basis, and am so excited to see what new heights we can reach together in 2020.”
Prior to joining PeerStreet in 2019, Ellen held positions as Managing Director at Countrywide Financial Corp, Treasurer at Stearns Lending, and Executive Vice President and Treasurer at both Nationstar Mortgage and Homeward Residential, Inc.
PeerStreet’s growth recently earned the company a place within the top 25 in Deloitte’s 2019 Technology Fast 500 Ranking of fastest-growing technology companies. With recent recognition for both its award-winning culture and technological innovation, PeerStreet has continually adapted as it has grown to capitalize on a clear need in the mortgage finance space for easy, transparent real estate debt investing.
We’re proud to have been named among the top 25 fastest-growing technology companies in Deloitte’s Fast 500 list. For the past 25 years, this list has brought attention to North American companies that deliver technological innovation, entrepreneurship, and rapid growth across a variety of industries.
The ranking is based on fiscal-year revenue growth over the previous three years; PeerStreet’s 4,586% growth was enough to land us at #23.
This announcement marks another example of our incredible growth trajectory this year, highlighted by the $60 million in Series C funding we recently raised.
We congratulate the other firms on the list, and want to thank you all for your support. We have even bigger plans for 2020, so stay tuned!
As reported this morning by Forbes, we’re pleased to announce the completion of a $60 million Series C funding round. Colchis Capital led the round with a consortium of institutional investors. Existing investors Andreessen Horowitz, World Innovation Lab, and Thomvest Ventures also participated.
This raise will help us continue to hire top talent and further scale our two-sided marketplace—the first and largest of its kind for investing in real estate debt.
“We’ve been a strategic partner of PeerStreet for years as an investor in the company and in loans on the marketplace. Leading this round was a natural next step for us,” said Ted Conrads, co-founder and president at Colchis Capital. “We’re excited to be a part of their growth as they continue to innovate as the market leader.”
In addition to the $60 million in funding, we also secured $4.25 billion in new capital commitments from institutions to purchase loans through our proprietary platform. These commitments will help bolster our existing suite of short-term bridge loan products and grow our recently launched 30-year buy to rent loan program.
When speaking about the raise, Brew Johnson, our co-founder and CEO, was proud of the success but remained focused on our vision as a company. “2019 has been an incredible year of growth for PeerStreet, and this funding round will accelerate that growth,” he said. “The injection of equity capital into our business via the Series C, combined with strong demand from loan buyers, means we will continue to provide value for lenders, end borrowers, and investors for years to come.”
Each investment opportunity we offer is reviewed both algorithmically by the PeerStreet platform, as well as manually by our experienced in-house real estate and legal teams. We then aggregate those loans for institutional and accredited retail investors, who in turn provide PeerStreet-approved lenders with capital. Those lenders then make loans to end borrowers who buy properties, improve them, then either sell them to homebuyers or rent them out to tenants.
Reflecting on how PeerStreet’s efforts align to today’s market, COO and co-founder Brett Crosby said, “I think our society is at a crossroads—there is a shortage of housing in many areas of the country and nearly 40 percent of existing homes were built before 1970. We can either build more homes and continue to take over green spaces, or we can up-cycle the existing aging and dilapidated housing stock. PeerStreet’s business model ultimately supports real estate entrepreneurs doing the latter, curing the capital constraints that have held them back and allowing them to reinvest in American communities.”
We are pleased to announce that we won first place in CRETech’s 2019 Real Estate Tech Awards (RETAs) for the Information & Intelligence – Crowdfunding category.
For the past six years, CRETech’s RETAS recognizes the year’s most innovative and cutting-edge companies that have played an integral role in advancing tech in the real estate industry. Winners are selected by an elite panel of judges, including the leading venture capitalists, angel investors, corporate investors, and thought leaders in the real estate tech industry.
As our COO, Brett Crosby said, “PeerStreet’s vision is to align the interests of everyone in this ecosystem—from lenders and investors to borrowers and the communities they represent—by providing both easier access to real estate debt and empowering participants to make better decisions. Winning a RETAS is further validation to our entire team that the work we’re doing is transforming this industry for the better.”
This win comes at an exciting time for us, as we recently expanded our product offerings into long-term real estate debt through a new Residential for Rent program and incorporated more loan types into our Automated Investing feature, which now boasts a low $100 minimum for small-balance reinvestments. As of March 2019, we have over $2 billion transacted on the platform and more than $1 billion in assets under management to date.
RETAS is presented by CREtech, the largest event, data and content platform in the commercial real estate tech industry. For more information about the Real Estate Tech Awards, click here. Also, we’re hiring if you’re interested in joining our growing team.
Is it time to update the definition of an accredited investor? We think so. Our goal is to make real estate debt investing available to as many people as possible. Read our CEO’s Forbes article where Brew Johnson offers ideas on why and how to democratize investing.
As Brew notes in the article, “My argument is still this: Wealth does not equal investor sophistication, and wealth should certainly not equal more opportunity. Today’s laws do not appropriately address either issue.”
“By being able to easily access data and information that in previous decades was generally only accessible to the most sophisticated (and wealthy) investors, today’s average investor is excluded from many more products that are made easy to understand and to invest in through technology, with a similar (if not greater) level of safety as opportunities non-accredited individuals can invest in.”We think the topic deserves more conversation and we’re glad to see Crowdfund Insider and others pick up on this thread. Surely, there will be much more debate on this topic and we hope to further fulfill our mission of democratizing real estate debt investments and truly level the playing field between Wall Street and Main Street.
We are happy to announce that investors who use Mint to manage their investment portfolios and performance can now view their PeerStreet positions on Mint’s platform. This has been requested by many of our investors for some time. Mint wanted to hear the demand directly from our customers, and thanks to you, they prioritized the integration with PeerStreet.
This integration with Mint is one of our most requested third-party integrations and follows similar PeerStreet integrations with other personal finance platforms, including Wealthfront, Betterment, and Personal Capital. These integrations provide additional insight and transparency to help customers understand their PeerStreet investments in the context of their overall portfolio and guide future strategic investment plans. Access to investments in real estate debt has improved over the years, so this is a natural integration for PeerStreet, Mint, and our common customers.
To add your PeerStreet account to Mint:
This is another exciting step forward in the growth and popularization of the PeerStreet marketplace. We announced earlier this year some key changes to the platform, namely reducing the reinvestment minimum and adding new options to Automated Investing. Both of those updates were supported by feedback from our customers and we are always glad to hear requests from our investors via [email protected].
We hope you enjoy this new integration and thank you for helping make this possible.
Our co-founder and COO, Brett Crosby, recently wrote an article for Entrepreneur.com that discusses the power and perils of two sided marketplaces, and offered his thoughts on how to best build one from his years of experience at PeerStreet. He reflects on some of the specific opportunities and challenges he has learned at PeerStreet and provides examples of other two-sided marketplaces that have flourished - and in many ways, dominated - their respective industries.
When our founders started PeerStreet, they often found it difficult to explain exactly what our platform is, and the scope of what we had set out to build. PeerStreet isn’t exactly a “marketplace lender”, nor is it a “crowdfunding platform” in the traditional sense of those commonly used categories in our space. PeerStreet is the industry’s first two-sided marketplace for investing in real estate debt with investors on one side and lenders on the other.
From the article, “as my co-founder Brew Johnson likes to say, ‘a one-sided marketplace builds one business; a two-sided marketplace scales thousands of businesses.’ This is the social impact element of two-sided marketplaces and one of its defining advantages.”
This model allows accredited investors to make more informed decisions and diversify their portfolios with unprecedented data and transparency into their investment options. It also provides private lenders with diverse capital sources and technology to make lending processes more efficient. That means they can make more loans to real estate investors who can then purchase and enhance more investment properties. Check out the article and let us know what you think.
Another fantastic piece on the power of two-sided FinTech marketplaces was recently penned by Pete Flint at NFX. It gives additional insights and examples specific to the FinTech space.
If you or someone you know is passionate about aligning the interests of two-sided marketplaces, we’d love to talk to them about a career here at PeerStreet.
We’re thrilled to announce two key upgrades to our Automated Investing product that will help you bring more diversification to your portfolio—with a few simple clicks.
We’ve lowered the minimum investment to just $100 for “small balance reinvestments” when using Automated Investing. This update also expands the investment types available for Automated Investing to include Cash Offer Loans and 30-Day Notes, which have shorter terms than typical bridge loan investment options.
New Industry-Leading Minimum Investment: $100
To help prevent idle cash from simply sitting in your account, you’re now able to automatically reinvest as little as $100 in new loan opportunities on the platform (the minimum was previously $1,000). This better enables you to quickly turn interest payments into active investments.
Expanded Investment Types
Investors can also now select Cash Offer Loans and 30-Day Notes as part of their personal criteria as well, making all of PeerStreet’s current retail investment types available for Automated Investing.
New to Automated Investing?
Automated Investing lets you reserve your spot in investments that meet your specific criteria with just a few clicks. You’ll be notified of each investment reservation, and have 24 hours to cancel for any reason. Please note that yield bumps are excluded from Automated Investing.
Our goal at PeerStreet has always been to level the playing field between Wall Street and Main Street. We’re here to help more people get access to the investments they want. These Automated Investing changes are just one of the ways we’re helping you create a personalized, diversified portfolio.
This week we were honored to see that the USA Today announced PeerStreet had won Comparably’s 2019 Culture Awards for both the “Best Places to Work in Los Angeles” and “Best Outlook for 2019.”PeerStreet’s recognition by Comparably is one of several award wins by our company in the past year, including being named one of the “2019 Best Places to Work in Financial Technology” by American Banker, and being included among the CB Insights Fintech 250 in 2018. PeerStreet, Brew Johnson, reacted by saying, “We are excited for what this year will bring for PeerStreet as we continue to rapidly scale our platform. We’ve now surpassed $2 billion transacted and $1 billion assets under management, and the goal is to continue the amazing work our team is doing while ensuring that PeerStreet remains a place our current and future employees enjoy and are proud to work for.”Brew Johnson founded PeerStreet alongside co-founder and COO, Brett Crosby. In December 2018, Brew was also recognized in Comparably’s “Best CEO for Diversity” category, which was awarded based on the company’s ongoing commitment to diversity, inclusion and a positive work environment as core values. Brew is also the recipient of the 2017 HousingWire Vanguard Award.Comparably CEO, Jason Nazar, commented on the accomplishment, "The pride PeerStreet employees have for their organization is proven time and again with their positive ratings on Comparably. Their placement on our Best Places to Work in Los Angeles and Best Company Outlook lists is an outstanding accomplishment, and is further proof of the company's commitment to building great workplace culture and changing the landscape of the real estate debt market."Comparably is a compensation, culture and career monitoring website that recently released its first quarter 2019 Culture Awards. Based on employee sentiment, these lists recognize companies of all sizes across the nation that have been positively reviewed by their employees for both their outlook for the company’s future and a variety of topics relating to workplace culture. The team at PeerStreet has grown alongside the business, this year having reached 191 full-time employees and continuing to expand its staff across all business areas. We’re hiring if you’re interested in joining our growing team.
Thanks to your participation and support, we’ve reached another exciting set of milestones at PeerStreet: $2 billion transacted on the platform and over $1 billion in assets under management.These numbers matter because loan volume is integral to the health of our platform. But they aren’t our only benchmarks for success. To truly transform this industry, we’ve aimed to integrate relatively novel concepts in the space: access, control, transparency, and the ability for all our investors to easily diversify (a common strategy to mitigate against potentially changing markets). That’s how we are working to level the playing field between Wall Street and Main Street. The fragmented nature of the industry made it unrealistic for most people, and even many institutions, to easily access short-term real estate debt—a unique asset class due in part to the physical property backing each investment. We’ve removed many of these old barriers to entry.Because this is a relatively new investment opportunity for many people, we want our investors to be as knowledgeable as possible. Losses in this space can and will happen, regardless of the market, the parameters of the loan, or the strength of our platform. Two PeerStreet transactions in the last year encapsulate the variable nature of this asset class, particularly when a foreclosure is necessitated. We recently experienced our first gain on a foreclosure sale, resulting in a 14% return for investors on an anticipated 8% return, as well as our first net loss on an individual loan, resulting in a -10.5% return. Up until this month, we had a four-year streak of no net losses* on any individual transaction for our investors. Our in-house Underwriting, Servicing, and Asset Management teams work with the goal to approve quality lenders, bring quality loans onto the platform, collect and distribute payments from borrowers, and, if/when a loan goes into foreclosure, work hard to ensure investors get paid back.The best way we can demonstrate our efforts is to show you the numbers. As of March 21, 2019, we’ve transacted on over 4,775 loans. Of those, 136 loans (i.e., fewer than 3% of the loans we’ve transacted on) have gone into default, meaning we have filed a notice of default or foreclosure complaint against a property.Of those 136 loans that went into default:
These numbers represent our current snapshot in time. The PeerStreet platform is a dynamic one—we have hundreds of lenders and thousands of investors transacting regularly, so these numbers can and will change. Like we have said, losses in any investment space are inevitable, in spite of our team taking great pains to avoid any problems for our investors. We wanted to highlight these numbers for a few reasons: (i) our goal is to be as transparent as possible with you, our investors, so you can make the most informed decisions of what to do with your investment capital; (ii) we want to highlight that one of the benefits of investing in secured real estate debt is that even when a loan goes into default, because of the collateralized nature of the loan, the property backing the loan can be sold to mitigate losses; and (iii) most importantly, we want to reiterate how investors can diversify on our platform. From the start, we created this marketplace to make it easy for investors to diversify their portfolios, namely through making it possible to invest in small increments ($1,000 minimum) and using our Automated Investing feature, where investors get faster access to investments that meet their personal criteria. If you were to put all your eggs in one loan basket, so to speak, the possibility of a loan default or foreclosure could carry more serious consequences. With PeerStreet, you can diversify across lenders, borrowers, asset classes, geography, yield, term, and LTV, all with just a few clicks. How you diversify is your choice. Diversifying your portfolio isn’t an impenetrable shield against borrowers who can’t (or won’t) pay their loans back, but it may help ensure that a single investment loss doesn’t define your portfolio. Our goal is to make your ability to invest in real estate debt as streamlined and hassle-free as possible. And as we keep rolling out new offerings, we’re excited to explore more ways to help our investors diversify. *When we have had to complete those foreclosures, either the value of the property at the time of sale negated a net loss, or sufficient fees and costs could be negotiated down or waived to avoid a loss. There were occasions when there was a loss at final payoff, but the interest and fees that were collected made up the difference, so investors didn’t lose money (and many benefitted from a positive return).
Today we’re excited to announce the launch of a new loan product for our network of lenders, Residential for Rent loans. These loans are for borrowers who are renting out a single-family residence to tenants. Because of the 30-year term nature of these loans, they are currently being offered to institutional investors who have been requesting access to this asset class. This begs the question: Why are we telling you about it? The answer highlights the power of the two-sided marketplace we’ve built. This launch comes at an important time in the real estate market cycle. As more people are finding themselves priced out of purchasing a home, the rental market continues to grow. People now have an opportunity to benefit by renting their properties for competitive rates and terms. That opens up a great opportunity for our network of lenders, empowering them to do more business with their current borrowers, while also attracting new borrowers who focus on buying and renting properties. Simultaneously, we’re providing financial institutions more access to this type of loan product, and yet another opportunity to diversify their portfolios (a common strategy for mitigating investment risks).The support of institutional investors is incredibly valuable for the PeerStreet marketplace. These institutions bring in large sums of capital, which in turn attracts more lenders to the platform. More lenders on the platform generate more loans for investors like you to choose from, making it easier to diversify your portfolio while increasing investor demand. That demand enables lenders to attract more quality borrowers and originate more loans, which helps to bolster the local economy and improve communities—one property at a time. The result? A virtuous cycle that benefits all participants on the platform, and the ecosystem at large.
We’re excited to announce two important new hires here at PeerStreet on our finance team: Ellen Coleman as Executive Vice President of Finance, and Bob Brown Executive Vice President of Finance & Corporate Development. These key hires come at the perfect time, as we increase the depth of our team’s finance and capital markets expertise to prepare for substantial growth in 2019. Both Ellen and Bob have extensive experience in the financial services and real estate sectors. Ellen Coleman brings more than 15 years of experience in corporate treasury within the mortgage industry. Her track record in both treasury operations and debt capital raising demonstrates proven success with building finance and treasury teams, cash management, and wire operations, and establishing new processes to support business objectives, particularly for enabling growth. Before PeerStreet, Ellen held positions as Managing Director at Countrywide Financial Corp, Treasurer at Stearns Lending, and Executive Vice President and Treasurer at both Nationstar Mortgage and Homeward Residential, Inc.Bob Brown’s 17-plus years of investment banking experience—with tenures at Goldman Sachs and Lehman Brothers—includes an extensive history of advising C-level executives in the financial services and fintech sectors. His expertise spans capital markets, corporate finance, and strategic M&A, with experience across a broad range of transactions and capital instruments, including common and preferred equity, senior and subordinated debt, and lead-managing IPOs. Prior to joining PeerStreet, Bob was a Senior Managing Director in FBR’s Financial Services Investment Banking division. Ellen and Bob join an impressive roster of executives with extensive experience in credit, real estate, finance, law, capital markets, and technology. Several key hires have been made over the previous year as PeerStreet enters our fifth year in business and continues our rapid growth. We now employ over 185 full-time staff, and doubled our office footprint this February to accommodate the momentum and accelerated growth plans. “These are particularly exciting hires for us, because they build upon the strong financial foundation we’ve already set, while better preparing us for our growth trajectory—in 2019 and beyond,” said Brew Johnson, our co-founder and CEO. “We’re at a place now where we need this level of specialized, senior talent, and we’ve found that with Ellen and Bob.”
We’re excited to announce a powerful new integration with Liquid Logics, a market-leading loan origination software (LOS) platform. This integration is another milestone in PeerStreet’s mission to build a stronger, more modern, and more transparent marketplace for both private lenders and investors.While this integration was designed to streamline loan submission for our lenders, the benefits ripple across the platform to investors, as well. As Liquid Logics lenders can now submit their loan information and documents with a single click, they have more time to focus on finding qualified borrowers and making high-quality loans. “By creating this seamless integration, the loan submission process is easier. And when that process is easier, there are more opportunities for lenders to sell their loans to a diverse pool of investors,” said Brew Johnson, co-founder and CEO of PeerStreet. “That stands to benefit our entire marketplace: more loans from our lender network means more opportunities for PeerStreet investors to better diversify their investment portfolios. That demand for diversification then increases the overall demand for investments in loans, which further fuels lenders who in turn work with more high-quality borrowers. It is a virtuous cycle that benefits all participants.”Liquid Logics is an ideal partner for such an integration, with their best-in-class technology and renowned LOS platform. “We’re very excited about this partnership, as it solidifies next-generation technologies in the FinTech space by merging loan origination directly into PeerStreet’s investor marketplace,” echoes Sam Kaddah, founder and CEO of Liquid Logics. “With this partnership, Liquid Logics helps lenders achieve faster and more efficient lending cycles by connecting them to additional sources of capital from PeerStreet, allowing them to do more business and to do it better.”The word is already out, with coverage in the news popping up in National Mortgage Professional Magazine and Crowdfund Insider. This integration is emblematic of PeerStreet’s approach of applying technology to remove complex and admin-heavy tasks—transforming the industry in the process. And we look forward to announcing more software integrations, and other key platform advancements, throughout the year.
The start of the new year is a great time to re-evaluate your investment strategies. If you already have a personal account open with PeerStreet, it may be time to consider the benefits of opening a Self-Directed IRA Account, as well.There are many advantages in opening an account that allows you to make tax-deferred investments. When you open a self-directed IRA account through PeerStreet, you can build for the future, diversify across investments, and may benefit from other tax advantages. In addition, when you open an account with an initial balance of more than $5,000, PeerStreet will cover the first year’s account fees.And even though 2018 is complete, you can still make 2018 IRA contributions before the tax filing deadline on Monday, April 15, 2019. Consider rolling over a 401k or transferring funds from an existing IRA.Open your account and transfer funds to get started today.