CrowdStreet announced a $12 million Series C round on November 6, 2019, with most of the capital coming from users of its own investment platform, according to GeekWire. The raise brought the company’s reported lifetime funding to $25 million. CrowdStreet’s CEO described the customer participation as a way to let individual investors take part in a financing round that otherwise would traditionally have gone to venture capitalists.
How did CrowdStreet raise $12 million?
CrowdStreet raised the money through a Series C financing round announced on November 6, 2019. GeekWire reported that most of the $12 million came from people who used CrowdStreet’s platform. The report did not give a precise percentage or identify how much each participant invested, so the customer-funded share should be understood as a majority, not a specific amount.
After the round, CrowdStreet’s reported lifetime funding stood at $25 million, according to GeekWire. This was a 2019 financing announcement; it does not mean the round is still open.
Why did CrowdStreet turn to its customers?
CrowdStreet presented the round as an extension of its aim to broaden individual investors’ access to commercial real-estate investing. CEO Tore Steen said: “We pride ourselves in democratizing access to commercial real estate investing, so we wanted to take it one step further and provide individual investors the opportunity to invest in a round that traditionally would have gone entirely to VCs,”
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The unusual feature was that users of a platform for investing in real-estate projects could also participate in financing the company operating that platform. Customer participation therefore went beyond the real-estate offerings CrowdStreet facilitated: members of its investor community supplied most of the capital in the company’s own funding round, as GeekWire reported.
What did CrowdStreet do in 2019?
At the time, CrowdStreet was described as a Portland-based commercial real-estate crowdfunding startup connecting developers seeking project financing with investors. In an October 31, 2019 company release, CrowdStreet described its marketplace as a way for accredited investors to access commercial real-estate offerings, while sponsors could raise capital online and manage investors through the marketplace and a software-as-a-service solution. Those descriptions reflect the company’s 2019 account, not a statement about its current products or investor eligibility.
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What else was reported about the company’s growth?
GeekWire reported that CrowdStreet expected its platform investment volume to reach $500 million in 2019, exceeding activity during its first five years combined. That $500 million figure was a forecast, not a confirmed year-end result. The outlet also reported 92 employees at the time and a company expectation of reaching 100 by year-end; those are historical staffing figures.
Just before the financing announcement, CrowdStreet announced three senior hires: Robert Stiles as CFO/COO, Londa Quisling as CTO, and John D. Havens as vice president of capital markets. The company said the appointments supported growth and marketplace expansion, according to its October 31, 2019 release.
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