CoFi announced today it has raised $7 million in seed funding to improve its construction financing experience. The round, which was led by Blackhorn Ventures, Metaprop, and Tenacity, will help CoFi process billions of dollars in active loan requests nationwide. With the new funding, CoFi will help builders address the country’s housing supply crisis, first by getting projects financed faster, and second by getting subcontractors paid in as little as four days.
“America is facing a housing crisis unlike any other, which has created an even greater urgency for the construction financing process to run as efficiently as possible,” said Dr. Raymond Levitt, operating partner at Blackhorn Ventures. “CoFi is accelerating financing for both builders and developers from start to finish – something many of their peers have struggled to do at scale. It’s thrilling to see how quickly CoFi has been able to match builders with lenders – even in new markets – and the sheer volume of financing they’re helping to place. This advancement will help propel the construction industry forward at a critical time.”
Construction technology funding reached $2.1 billion last year – a 100 per cent increase over 2020. The construction industry represents 6.3 per cent of the U.S. GDP, with millions of contractors and workers on job sites every single day.
“CoFi is at the junction of construction and fintech, which creates incredible growth potential,” said Ben Narasin, founder and general partner of Tenacity Venture Capital. “There’s competition in both industries, but CoFi is the only company doing both a lending marketplace and industry-specific SaaS payment software. With billions of dollars in loans through their platform in under a year, the opportunity is unbounded.”
Co-founders Mike Lacey and Cam Harris, were once contractors and developers, and after years of frustration with the process, they formed a company. Its offerings begin with Construction Loan Marketplace, which engages multiple partner lenders in a hand-picked, strategically grown lender pool, CoFi said it can ensure the best rates and terms for construction loans. Available lenders specialize in acquisition, development, and vertical construction. Digital Lending Platform helps subcontractors and suppliers get paid faster, CoFi said in a statement. By providing an in-house, networked inspection strategy, CoFi allows builders to streamline cash to the job site so everyone can get paid quickly.
“At CoFi, we go to bat for our builders and developers. We’ve seen firsthand how frustrating it can be to spend precious time and energy applying for loans and jumping through legal hoops to get our teams paid quickly,” said Lacey “We built CoFi into the kind of tool I wish I’d had as a builder – one where we’ve replaced sending inspectors out to a job site with tech driven remote inspections to capture project progress and allow developers to sign off on the distribution of funds.”
“This flexible payment schedule wildly improves upon the industry standard of a 74-day pay cycle, and it can mean all the difference for a builder who might otherwise lose good workers because they can’t get paid quickly enough.”