Last week, Crowdfund Insider reported on Republic‘s move into real estate crowdfunding.
Republic was initially launched as a Reg CF funding portal targeting early-stage firms with a focus on underserved markets. Since platform launch, Republic has expanded into additional verticals including Republic Crypto, a game crowdfunding platform (FIG), and, as of last week, real estate investment platform.
Republic has been messaging its interest in broadening its securities offerings for quite some time. At the time of the announcement of Republic Real Estate, Republic founder and CEO Kendrick Nguyen said, they “want to diversify from the “all or nothing” return potential of startup investing” with micro-investing in residential real estate, starting at $100.
The expansion came via an acquisition of a startup called Compound that Republic felt was a good match for its company culture. Compound had previously listed a real estate based securities offering on Republic.
Today, in less than a week, all three of the inaugural offerings have topped their funding hurdles. While the minimum raises were pretty low, the initial success is pretty encouraging for the investment platform. Each offering is for a “Crowd IPA” or Crowd Interest Purchase Agreement. You may read more about this type of security here but in brief, you are purchasing a membership stake in a Limited Liability Company (LLC).
Real estate investment is viewed as a less risky asset class than early-stage ventures – many of which fail. Ever since online capital formation was legalized under the JOBS Act of 2012, a good number of real estate investment platforms have emerged catering mainly to accredited investors. Republic is offering real estate backed securities under Reg CF and thus open to all investors. Republic is one of a few real estate funding platforms currently offering real estate investment opportunities to non-accredited investors but we expect that, over time, this number will grow.