Fundrise Launches $1 Billion Growth Equity Fund
  • Fundrise is launching a $1 billion growth equity fund called the Fundrise Innovation Fund.
  • The new VC-like fund will facilitate crowdsourced investments in private technology companies.
  • The move is Fundrise’s first significant expansion outside of private real estate.

Alternative investment firm Fundrise was originally founded to give retail investors access to invest in private real estate. Today, the Washington, D.C.-based company is expanding its horizons, adding access to another area of investing with limited access for everyday investors– venture capital (VC).

The company is launching the Fundrise Innovation Fund, a $1 billion growth equity fund aimed to democratize access to investments in top private technology companies. The move is Fundrise’s first significant expansion outside of private real estate.

“The proprietary systems and technology infrastructure we created to tap into private real estate are now capable of disrupting ownership of other asset classes previously inaccessible to individuals,” Fundrise said in a blog post announcement. “…in short, Fundrise has the potential to not only open up but completely transform the entire $10 trillion private market.”

Fundrise was founded in 2010 to offer investors an alternative to stocks and bonds. In 2012, the company launched its real estate investment platform that allows users to invest as little as $10 in private real estate. Today, Fundrise has 300,000 users and has acquired more than 200 assets, collectively worth more than $5.1 billion, on behalf of its investors. The company takes a low-fee approach, charging a 0.15% annual investment advisory fee along with a 0.85% annual asset management fee for each fund.

Fundrise said it selected to expand into VC investing because it has proven to be one of the best-performing investments as well as one of the most exclusive investments, since the general public is excluded from investing in a company until after it goes public.

With the VC fund, Fundrise will enable users to invest in a diversified portfolio of high-growth private tech companies ranging from mid-to-late stage, as well as some public equities. The company’s fee model for the fund will not come with a “carried interest” profit sharing component.

Fundrise will open VC investing to current users of its real estate offerings first, though “on a limited basis.”

Photo by Warren Wong on Unsplash