Case Study

CrowdStreet

Democratizing Access to Commercial Real Estate

CrowdStreet is revolutionizing the commercial real estate (“CRE”) market by democratizing access to institutional CRE investment opportunities for individual investors. Rally Ventures led the $2.25M Series A in March 2016, invested in all subsequent rounds and is the largest shareholder of the company. 

CrowdStreet was founded by Tore Steen and Darren Powderly. They founded CrowdStreet in the wake of the JOBS Act, which permitted access to private investments by ordinary citizens. The JOBS Act was passed in 2012 by Congress as the economy was beginning to recover from the Great Recession. The goal was to boost economic growth and job creation by improving access to public capital markets.

Historically, CRE opportunities were only within reach of institutional investors or very wealthy individuals. Moreover, those who had access usually only had access to local sponsors and no way to truly diversify across geographies, types of properties and stage of product. Similarly, from a sponsor standpoint, being able to access trillions in capital that had previously not been available is game changing. This, coupled with CrowdStreet’s ability to raise capital as quickly as hours versus spending months going through institutional processes, is a material benefit.

Rally Tech Partners were early and significant customers of CrowdStreet’s marketplace, raising tens of millions of dollars on the then nascent platform. They were also active investors on the marketplace and in the company, and they provided substantial product feedback. Finally, the Tech Partners provided marketing advice and introductions to several other sponsors.

Within 5 years of Rally’s investment, CrowdStreet was transacting over $1 billion annually and it had rapidly become the leader in the space. Meanwhile, several competitors that had raised more capital had gone out of business or achieved only a fraction of the traction CrowdStreet had achieved. 

Today, CrowdStreet is a leader in the DIY marketplace for commercial real estate with a series of diversified and thematic CRE funds, a digital wallet and debt products with far more in store. Their products are available on their marketplace, as well as a number of other investment platforms and several prominent Registered Investment Advisors (RIAs). Tore and Darren have done a particularly great job of blending their respective backgrounds in tech and CRE to attract people from both worlds and build the standout team they have today.

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