Who Funded Willow's Seed Round?
A Montreal real estate development company, Harden Group, invested. Furthermore, the company also raised some of its funds from FrontFundr, an equity crowdfunding platform. Established in 1985, the Harden group is best known for developing retail property spaces in Canada. Willow appears to be Harden Group's first-ever startup investment.
Willow's enjoyed significant success on FrontFundr. The company set a $1 million CAD goal ($788,000 USD) as a goal with a $250 minimum investment. At the end of its campaign, the company raised $1.34 million CAD ($1 million USD) from 221 investors when the campaign ended on December 18, 2020. The funds raised through the platform give investors preferred shares worth a maximum 20% stake in the company. According to Willow's FrontFundr page, the company has a valuation of over $5 million.
Who Is Willow Competing Against?
Willow's competition in real estate investment comes in several shapes and types. At the large end of the spectrum, there are established real estate investment trusts (REITs worth billions of dollars like Riocan (stock ticker: REI.UN) and Canadian Apartment Properties REIT (CAR.UN). These funds own residential, commercial, and other types of facilities across Canada and elsewhere. At the smaller end of the spectrum, individual investors, family offices, and other investors own property as well. The company's startup competition includes Roofstock, Cadre, Fundrise, and Reitium.
However, Willow does not directly invest in properties. Instead, it operates more like a brokerage that brings together buyers and sellers of investment property. Moreover, the company aims to make real estate investment accessible to more people.
The company plans to "fractionalize" each property into 10,000 units. Individual investors would then have the option to purchase one or more units of a house, mall, or other property types. Willow plans to earn revenue in three ways: a listing fee, a transaction fee, and a management expense fee. The first two fees would be a one-time fee. The management expense fee would generate ongoing, recurring revenue for the company.
Inside Willow’s Founding Team
The company's founding team includes CEO Logan Yergens (previous experience in debt and equity investment), Chief Compliance Officer Mike Hibberd, and Chief Technology Officer Ray Johannsson . As an investment platform, staying compliant with laws and regulations is critical. That's why Hibberd's experience in risk management and startups will play an important role.