Privlo Raises $3.8 Million from Spark Capital and QED Investors and $350 Million from a New York-based Private Real Estate Investment Fund
Capital will expand Privlo's online platform offering private mortgage loans to high-quality individual borrowers
LOS ANGELES, July 30, 2014-- Privlo, an online provider of private real estate loans for high-quality borrowers, today announced it has raised a $3.8 million seed plus round of funding from Spark Capital and QED Investors and up to $350 million in debt capital from a multibillion dollar New York-based private real estate investment fund. The financing will enable Privlo to expand its online lending platform to serve borrowers across the United States.
As a result of changes in the banking system, high-quality borrowers with non-conforming credit characteristics, including many self-employed business owners, real estate investors and individuals with a one-time negative credit event, have been unable to obtain a home loan. As a real estate private equity executive, Michael Slavin saw the need first hand for an alternative lending solution.
Slavin founded Privlo to solve this problem. The company successfully launched as a peer-to-peer lending platform, matching individuals who were seeking loans with individuals who wanted to make direct loans to borrowers. In a single small city, the company quickly facilitated more than $28 million worth of loans. Due to the sizable demand in the market, Slavin initially brought QED Investors on board and quickly added Spark Capital and the private New York based fund to expand the Privlo platform nationally.
"Privlo, which takes a consumer-friendly approach, provides liquidity to an important segment of the housing market – the largest economic driver in the U.S. – and reduces the government's exposure to the market," said Slavin. "Traditional lenders rely on government agencies for funding and can only cater to a very specific kind of borrower. Our proprietary underwriting technology and processes enable Privlo to serve a much broader set of credit-worthy borrowers in an easy, hassle-free way. I'm pleased to have Spark Capital, QED and our new debt capital provider on board, as they truly understand the need to cater to this kind of customer."
Privlo has built proprietary scoring software to more accurately evaluate each individual's unique financial picture. Unlike traditional lenders, the company delivers rapid results, closing loans in weeks instead of months. Privlo's team provides personalized service to guide each step, with clear terms and direction for a hassle-free experience.
"Privlo's approach is to solve credit dislocation and be highly consumer focused, resulting in a business model that yields a truly differentiated product and offers a remarkable customer experience," said Spark Capital General Partner Alex Finkelstein. "We're confident that the company's outstanding team and product will have a positive impact both on the housing market and the consumers they serve."
"In addition to focusing on the unique needs of high credit quality customers that don't fit within the standard mortgage box, Privlo gives private capital a direct line to high quality mortgages," said Frank Rotman, a Founding Partner of QED Investors. "We're excited to see this company thrive as they address one of the most challenging problems of our time."
Privlo is a leading online lender for well-qualified borrowers who have fallen through the cracks inherent in the traditional agency and qualified mortgage (QM) process. At the heart of its commonsense approach is a proprietary decision-making process that values each individual's unique financial picture. Privlo offers an incredible customer experience and speed and certainty of close. For more information, visit www.privlo.com.
ABOUT SPARK CAPITAL
Spark Capital is a venture capital firm that partners with exceptional entrepreneurs seeking to build disruptive, world-changing companies. Founded in 2005, the firm manages approximately $1,500,000,000 across four funds. Headquartered in Boston, Spark maintains an office in New York and invests across the globe. Spark Capital focuses on Internet and mobile investments across the following key categories: advertising & monetization, commerce & services, content & media, financial services, hardware & infrastructure, mobile and social. Some of Spark Capital's most notable investments include Adap.tv (acquired by AOL), AdMeld (acquired by Google), Oculus (acquired by Facebook), OMGPOP (acquired by Zynga), Tumblr (acquired by Yahoo!), and Twitter. For more information, visit www.sparkcapital.com.
ABOUT QED INVESTORS
QED Investors is a boutique venture capital firm that actively supports high-growth businesses that use information to compete and win. Support is tailored to the specific needs of each portfolio company typically providing a combination of both capital and capability. QED's Founding Partners bring 60+ years of hands-on operational expertise building financial services enterprises and currently invest broadly in the financial services ecosystem as well as in disruptive data driven customer acquisition businesses. Some of QED's most notable investments include Credit Karma, Braintree (acquired by eBay), MediaMath, Prosper and 2U. For more information, visit www.qedinvestors.com.
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