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.
As we celebrate the New Year, we want to say thank you! With your participation and support, PeerStreet surpassed $1 billion in investments from our retail investors and institutional buyers combined in 2018 alone, bringing our total funding volume to $1.7 billion since PeerStreet launched.We highlight volume metrics because continued growth can create a virtuous cycle: more loans allow for stronger diversification and more data, which in turn can improve underwriting and bring even more opportunity to the ecosystem. This volume also has a great impact within the communities that are being transformed through the work of hundreds of lenders and thousands of real estate entrepreneurs in our network. By improving communities one house at a time, local lenders can more effectively bring material change in neighborhoods throughout the country.But volume is just one proxy for success. Loan quality, the ability to easily diversify in this asset class, and customer experience remain top priorities for us. This past year, we made several refinements to our credit box and rolled out new loan products to further support investor diversification. Investment options on PeerStreet now include single family residential, multifamily, commercial, cash offer loans, and 30-day notes. We also launched recurring deposits and improved sorting options on your investor dashboard to make our platform even easier to use. We’ve accomplished this all while building a company where people like to work, which has been demonstrated by being honored with several Comparably Awards including, Best Company Happiness, Best Company Leadership, Best CEOs for Women, Best Company Managers, Best CEOs for Diversity, Best Companies for Compensation, and being a top 25 company to work for in Los Angeles. PeerStreet also received several other awards in 2018, most notably among them was HousingWire Tech 100, AAPL Member of the Year, and HousingWire Insider. As we look to the year ahead, we see additional areas for innovation and are excited to deliver an even better customer experience. We are grateful for the feedback and suggestions you’ve provided. We’ll keep them top of mind as we work to uncover new ways to make investing on PeerStreet even easier and more rewarding. We hope you had a wonderful holiday, and we’re looking forward to a prosperous New Year!P.S. If you haven’t set up your self-directed IRA account, perhaps this is the year?
The American Association of Private Lenders’ (AAPL) Annual Conference in Las Vegas was a marquee event for us this year. Our co-founder and COO, Brett Crosby, gave a presentation at the show to explain why the two-sided marketplace approach of the PeerStreet platform is so unique, and our vision for the health of our industry.The highlight of the seminar was the announcement of these key product launches, which help empower our lenders to fund more loans—with less work and increased alignment of interests between borrowers, lenders, and end investors.
Our newly announced API enables our platform to integrate directly with lenders’ own Loan Origination System. We want to seamlessly fit into our lenders’ regular workflow, so this integration will make it easier for them to fund loans and sell them with less admin work—all of which should continue to strengthen and diversify the marketplace for investors.
Instantly generate documents, starting with single family residential loans. We’re piloting this program in California, and will add more states in the coming months. This will help our lenders serve their borrowers faster and reduce turnaround time and costs.
Like our investors, our lenders are helping us build this marketplace. We don’t want this loyalty to go unnoticed, so we will be rolling out a tiered program to give lenders access to greater benefits based on their level of involvement. We also hosted a Lender Celebration & Awards Ceremony to further show our gratitude to our lenders and continue to get to know them on a more personal level. During the awards ceremony, we were thrilled to announce 2018’s PeerStreet Lender of the Year, Karzi Equities, who grew from lending $2.5 million prior to joining PeerStreet to over $100 million on our platform (pictured above). And as a bit of icing on the cake, Brett Crosby also picked up AAPL’s annual Member of the Year Award.
This year’s conference was an excellent opportunity for us to establish and strengthen relationships with lenders, and we do not take these moments for granted. The support and excitement around our platform continues to energize us, and we can’t wait to see what we bring to AAPL next year.
When we celebrate an anniversary at PeerStreet, we do so with a focus on the people who matter most: our customers. Without you, our mission to transform the mortgage finance industry couldn’t get off the ground. Since we launched our platform to the public at the Money 20/20 conference on October 30, 2015, we’ve grown our company—and our marketplace—significantly. So much so that for the second year in a row, we’ve been included in CB Insights Fintech 250, which celebrates the fastest-growing FinTech startups. Thanks to lenders and investors like you, it’s safe to say our mission is off the ground. We now have 160 employees—more than double where we were this time last year—and our platform has expanded its reach to more than 40 states, hundreds of lenders, and thousands of investors, including individuals and world-class institutions. We’re funding more than $100 million of loans per month through the marketplace, and have had over $1.5 billion invested through the PeerStreet marketplace to date. We’re proud of this progress, but we’re equally proud of one area we’ve stayed exactly the same: Our employees are still really happy. We know that to develop and maintain a quality marketplace, we need a team of smart, driven, talented people who want to do good work for our customers. To that end, we were just named a winner for Best Company Happiness from Comparably, ranking us in the top 25 small/mid-sized companies in the country for employee happiness at work—a ranking based entirely on employees’ own self-reported, anonymous ratings. We also recently won several other 2018 Comparably awards, including Best Company Leadership, Best Company Managers, Best CEOs for Diversity, Best CEOs for Women, Best Companies for Compensation, and were crowned a top 25 company to work for in Los Angeles. To continue being the platform our customers want and need, we know there’s more work for us to do—and we’re well on our way. We’ve already transitioned from a single-asset class to multiple assets, including Single Family Residential (SFR), Multifamily, Small Balance Commercial, and Cash Offer Loans. These are the moves that will enable even more growth opportunities for our entire ecosystem, from investors, lenders, and borrowers, to communities as a whole.
With investors and lenders like you as partners, we’re looking forward to seeing what we can accomplish in our fourth year—we’ve already got a number of exciting updates and news in the pipeline. We’re grateful for your continued feedback and support, and we’re always interested in hearing from you on how we can continue to improve. So if you have any suggestions or questions, don’t hesitate to reach out to us at [email protected].
PeerStreet was recently covered by CNN in their Money Moves column with a piece that posed the question on a lot of investors’ minds: How can people invest in real estate without buying a home? Co-Founder and COO, Brett Crosby, describes how PeerStreet’s platform allows investors access to short-term investments in bridge loans in a way never before possible. The story of how this new PeerStreet marketplace came to be has proven to be as interesting to media outlets as the marketplace itself. Brett recently sat down for a one-on-one interview with John Siracusa, host of the biweekly Bank On It podcast, to discuss his journey—from co-founding Google Analytics to co-founding PeerStreet, and how the aftermath of the 2008 crash inspired the company’s creation. You can hear more about PeerStreet’s pioneering place in FinTech throughout the second season of BrightTALK’s webinar series “Focus on Fintech”—particularly in the just-released third episode, “What makes a successful FinTech?”—where Brett discusses the origins of PeerStreet and how we’re setting out to transform this $10 trillion-with-a-T industry. We’re happy to talk about ourselves—but we’re even more excited when we see that others are talking about us all on their own, like Forbes did in its article “The 3 trends to watch in FinTech, according to top VCs.” We’re getting recognized outside of FinTech, too. Comparably ranked PeerStreet in the top 25 small/mid-sized companies in the country for company happiness. The best part? This award is generated entirely by employee ratings. It’s imperative to us that as we build this transformative marketplace, our employees are happy and successful as they do it.This comes at the heels of several other 2018 Comparably awards, including Best Company Leadership, Best CEOs for Women, Best Company Managers, Best CEOs for Diversity, Best Companies for Compensation, and being a top 25 company to work for in Los Angeles.
Our team is always exploring ways to make it easier to invest on our platform. So we are excited to announce a new feature we recently rolled out: Recurring Deposits.Based on requests from many of our customers, we created an easier way for investors to deposit funds on PeerStreet. A lot of people like to set aside a certain amount of money on a set schedule (like pay periods) for pure saving purposes. So we thought to apply the same concept but with the opportunity to earn interest on top of those savings. You can easily turn on Recurring Deposits by visiting your account page. Funds can be deposited on the day and frequency you choose, and in the amount you specify.We hope this new launch will make your experience on PeerStreet easier and more helpful for your investing goals. If you have any feedback concerning Recurring Deposits, please feel free to write to us at [email protected].
We recently announced a new investment product called Cash Offer Loans, which add to the investment options available on PeerStreet. Cash Offer Loans provide additional investment durations available on our platform. Investors can now find terms that range from as short as 30 days to as long as 36 months.Our goal is to give investors a broad range of options to choose from and Cash Offer Loans are one step further down that path. Additionally, Cash Offer Loans are made to a service provider who helps homeowners buy their next home with an all-cash offer so they can be more competitive in the home buying process. The loans give them a chance to get into their new home before selling their current residence while passing along the yield of the loan to investors. We hope this new launch will continue to improve your experience on PeerStreet. If you have any feedback, please write to us at [email protected].
Watch PeerStreet Co-Founder and COO, Brett Crosby, on his most recent interview on The American Dream TV Show. Back in March Brett made his first appearance on The American Dream TV Show and we were thrilled to have him invited back on the show again, this time in the studio. On the show, which aired first in San Diego, then nationally, Brett sat down to chat with Craig Sewing. They discussed how PeerStreet is democratizing access to investing in real estate debt and the effects of our mission. Our model allows individuals to invest in loans already vetted by private lenders throughout the United States. Brett goes on to discuss the state of the market and how PeerStreet views real estate debt as an asset class.Thanks to American Dream TV for having us once again to help explain the ramifications of our platform and the unprecedented capabilities PeerStreet has created for people to invest in and diversify in real estate debt.In addition to striving to level the playing field between Main Street and Wall Street, we are passionate about maintaining a healthy and positive culture internally. We were honored to win several culture awards recently. If you or someone you know is looking to be a part of what we are doing, check out our open positions on our Careers page or email us at [email protected].
USA Today recently reported that PeerStreet is being recognized for a number of awards including, Best Company for Managers, Best Company for Leadership, Best CEO for Diversity and Best CEO for Women. The data for these rewards were collected by Comparably. Not only are we thrilled with these awards, but we are honored to be listed amongst some of the country’s largest and most reputable companies like Google, Netflix, Apple, Salesforce and Microsoft. We have a long way to go before getting to their stature, but that’s even more reason we’re honored to be included in such a prestigious list. Recently we’ve been announcing big company milestones highlighting the progress we’re making as a business like $1 Billion in loans funded and our $30M series B round. But we feel a completely different kind of joy when PeerStreet is recognized for its people and culture. Accomplishing big milestones are much more rewarding when surrounded by positive colleagues who share in our goals and contribute to our culture. Join us! Are you or someone you know an innovator with the talent and experience to help us achieve our mission? We are currently hiring for many roles. Take a look, then email [email protected] for more information.
When we launched PeerStreet in October 2015, we were excited to begin on our journey in transforming the mortgage industry. Our co-founders recognized the need in the market and came together to create a powerful platform to connect investors and lenders. The growth has been incredible. As investor appetite for short-term real estate backed assets has grown, PeerStreet has quickly become the premier platform for accessing real estate debt investments. Just one year ago this month, we announced that $300 million had been funded since we started. In September, we announced we had surpassed $500 million. And now, we are happy to announce that we’ve surpassed another major milestone -- $1 billion in loans funded through PeerStreet. And we’ve really just started. As our platform has grown, it has created greater opportunity for investors to diversify their capital across loans and for lenders to access a new, reliable capital source. Looking forward, we expect the network effects of the platform to continue creating value and unlocking opportunities for participants because, at the end of the day, scale matters: more investors on the platform means more capital provided to lenders who make more loans to borrowers, which feeds back into more value for investors (greater diversification, better data to refine credit models, new investment products, etc.).With that in mind, we recently announced that we’ve begun expanding into new asset classes including buy-to-rent, multifamily and small balance commercial real estate loans. We’ve added senior talent, including John Devereux as Chief Real Estate Officer and Greg Galusha as our Head of Commercial Real Estate to help lead those efforts. Not only will these efforts bring even more diversification options to our investors, they provide more flexibility to lenders who can then provide more options to qualified borrowers. Everyone in the ecosystem wins.Above anything else, the key ingredients that have made PeerStreet successful are our customers, our partners and our incredible team of employees and investors. We thank you all for your continued support and participation as we continue to transform mortgage finance for the better.
Today we are pleased to announce that we have raised $29.5 million in a Series B funding round and that we have funded over $900 million in loans. Since opening our doors to the public in 2015, we've been working hard to democratize access to real estate debt. This round of funding helps us further our mission and invest in the areas that matter most to our lenders and investors.The raise will accelerate our growth and allow us to broaden the type of real estate loans we cultivate from our network of lenders. The Series B round was led by World Innovation Lab. Existing investors Andreessen Horowitz, Thomvest, Colchis Capital, Felicis Ventures, and others participated along with new investors, Solon Mack and Navitas Capital. The funding will also support our efforts to hire more world-class talent. This funding round follows another year of high growth for PeerStreet. Just last May we announced $300 million in loans funded. We’ve more than doubled volume from the previous year and are on track to continue that growth trajectory. PeerStreet is now integrated with three prominent personal finance platforms including Wealthfront, Betterment, and Personal Capital. We have also significantly enhanced our suite of tools and analytics for lenders over the past year and released an innovative short-term investment product for investors seeking greater liquidity.We are excited to share this news and some new milestones we’ve recently achieved. Most recently, we have been honored with a number of industry awards recognizing our culture. Not only were we named one of the Best Startups to Work For in Los Angeles, but we were also recognized as one of the Best Fintechs to Work For.We are thankful for the incredible support our community has shown us since our launch and are excited for what’s ahead. Come join us on our journey as we pursue our goal of reshaping real estate finance for the better!