GROUNDFLOOR Announces Record Investor Growth in 2020

Despite the pandemic, the wealthtech platform experienced a 50 percent year-over year increase in investor activity

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Feb 03, 2021, 08:42 ET

ATLANTA, Feb. 3, 2021 /PRNewswire/ -- GROUNDFLOOR, the wealthtech platform that allows everyone to build wealth through real estate, is announcing another record-breaking year. Despite unprecedented challenges brought on by the pandemic, GROUNDFLOOR experienced new all-time highs for investment activity, rolled out several new lending programs to spur economic growth, and won seven awards recognizing the company's continued fintech innovation. In all, GROUNDFLOOR's users invested $145 million into its short-term, high-yield real estate projects, leading to a 50 percent increase in year-over-year growth for investor activity.

"The performance of our broad-based retail investor network in the face of last year's challenges demonstrated its power and anti-fragility," said co-founder and CEO Brian Dally. "In 2020 we went all in, and it paid off. Now with zero dependence on institutional capital, we've never been stronger, more profitable, or more focused on fulfilling our mission at scale."

Additional highlights and growth metrics from 2020 include:

Record investor activity: The company surpassed 87,000 registered users, who continued to set new growth records each quarter. In Q3 2020, GROUNDFLOOR achieved an all-time record for investment volume of $44 million, which represented a 33 percent quarter-over-quarter growth and broke the company's previous record of $33 million in Q2 2020. Even as the COVID-19 pandemic slowed down much of the financial world, the number of investments on the platform grew by 28 percent, from 307,586 in 2019 to 394,882 in 2020; and the average number of investors per loan shot up to 710.
High-yields continued: At a time when many competitors halted distributions, GROUNDFLOOR repaid over $5.1 million in interest on 444 loans to investors in 2020. On an annualized basis, the company delivered a 10.42 percent average rate of return^{^[1]} on investments, demonstrating that its short-term, high-yield product continues to deliver consistent returns year-over-year.
Steady loan originations: After intentionally scaling back lending operations in Q2 2020 at the onset of the pandemic, the company strategically pivoted to discontinue its institutional loan sales program in favor of running 100 percent on individual investor capital. Through this pivot, the company was able to restore pre-COVID lending guidelines by early Q3 2020. The company exited the year with a total of 380 loans originated. Total loan origination volume declined by 41 percent from 2019. During this same period the average loan size increased by 14 percent from 2019, growing from $177,371 to $201,989 in 2020. To date, GROUNDFLOOR has originated over 1,730 loans since inception.
Product innovation: GROUNDFLOOR unveiled a new Loan100 product to provide financing for up to 100 percent of total project costs, including purchase and renovation (i.e. up to 100 percent Loan-to-Cost). This program allows our developers with an extensive and proven track record to borrow funds with 0 percent down.
Reduced Origination Fees and Interest Rates: For the first time since 2017, GROUNDFLOOR reduced fees and interest rates to further support borrowers who faced increasing pressure on their profit margins during the pandemic. The reduced fees included a decrease of 1 percent across the board and of up to 1.5 percent off origination fees for qualifying borrowers.
More public fundraising and company ownership: Continuing with the company's philosophy of transparency and accountability, GROUNDFLOOR continued to raise equity from the general public through a new partnership with SeedInvest. The campaign has become the most funded fintech deal in SeedInvest's history, raising over $3.6 million from over 2,000 SeedInvest investors thus far and bringing GROUNDFLOOR's total public shareholders to over 4,700, who now own 25.4 percent of the company.

Lastly, GROUNDFLOOR continued to receive many accolades for industry leadership and fintech innovation. In 2020, GROUNDFLOOR won the following awards: the Deloitte Technology Fast 500, Inc. Magazine's List of 5,000 Fastest Growing Companies, Benzinga's Best Lending Platform Award, the HousingWire Tech 100 Award, the Technology Association of Georgia's Top 10 Most Innovative Companies, Atlanta Business Chronicle's Pacesetter Award and the Golden Bridge Award for Startup of the Year.

About GROUNDFLOOR
Founded in 2013, GROUNDFLOOR opens private capital markets to all. GROUNDFLOOR was the first company qualified by the U.S. Securities & Exchange Commission to offer direct real estate debt investments via Regulation A for non-accredited and accredited investors alike. Today, it remains the only product offering everyone the ability to build fully customizable real estate debt portfolios for short-term, high-yield returns. The company is headquartered in Atlanta and has raised $26 million in equity capital from a variety of sources, including venture capital and online public equity offerings. As of its most recent round of financing, the company is 25 percent customer-owned.

Media Contact:
Hela Sheth
[email protected]

^{^[1]} Average annual rate of return based on all loans that we repaid to investors in 2020. This is a weighted average return of the return on each loan based on the total principal amount.

SOURCE Groundfloor Finance Inc.