As businesses scale they must contend with both challenges and opportunities, PeerStreet cofounder and CEO Brew Johnson said.
I spoke with Mr. Johnson at the conclusion of LendIt 2017 in New York City, where PeerStreet won the inaugural LendIt award for Emerging Real Estate Platform, which is awarded to the young company that has demonstrated the greatest potential to impact the future of real estate investing.
That was the latest bit of good news for the platform that recently surpassed $250 million in total originations. During LendIt PeerStreet announced an integration with independent online investment adviser Betterment which will see clients of both be able to view their PeerStreet investments on the Betterment dashboard. Just last week a new integration with automated investment service WealthFront was unveiled.
There are plenty of opportunities for similar integrations, but as a growing platform with only so many hours in the day, the team has to pick its spots, Mr. Johnson said. In the case of Betterment customer requests were so frequent they could not be ignored.
Before integrations there needs to be a more core focus, Mr. Johnson explained.
“Scaling while maintaining quality has always been key,” Mr. Johnson said. “We’ve been doing that.”
Doing that well enough to attract a $15 million Series A round led by Andreessen Horowitz.
“They’re a phenomenal partner to have in the business,” Mr. Johnson said.
A half-joke in some circles is that the wrong type of venture capital firm can do more harm than good. But the right one’s value extends beyond money, Mr. Johnson said. Andreessen Horowitz brings access to companies in their sphere whose officials provide advice on everything from hiring practices to software.
Andreessen Horowitz general partner Alex Rampell sits on PeerStreet’s board.
“He’s an incredibly astute and smart guy,” Mr. Johnson said. “He’s founded and built companies before and understands our space and the marketplace.”
Looking ahead Mr. Johnson said that a key focus will be on continuing to bring value to lenders, borrowers and investors. That comes through adding technology that removes obstacles and makes the entire PeerStreet process easier.
“Most lenders aren’t technology companies,” Mr. Johnson said. “They don’t invest in technology companies, so we can provide that value by investing in that technology for them to make their operations more efficient.”
Technology providing both a simpler process and quality underwriting attracts more investors and more borrowers. Increased choice means better diversification.
PeerStreet’s unique structure enables them to collect data from both sides of the equation, data which often is unique to their platform, Mr. Johnson explained. Working with small lenders around the country allow them to capture local market idiosyncrasies and bring increased transparency.