Fraction, helps homeowners get access to their home equity, has raised $20m in its Series A round.
QED Investors served as the lead investor, with commitments also coming from Impression Ventures, Primetime Partners, Panache Ventures and Global Founders Capital. Several angel investors also joined the round, including the founders of Brex and Bitso.
With the equity burst, Fraction hopes to expand into the US market and build new products that will bolster the transparency and flexibility for homeowners to manage their home equity.
The Canadian FinTech company provides homeowners with access to their house’s equity in the form of a loan. A customer can convert up to 40% of their home equity into tax-free cash, without the need of making a monthly payment. Interest is tied to the value of the home.
After five years, the homeowner can either choose to extend the agreement or buy Fraction out. Since it launched in February 2021, clients have received and average of $350,000 from their home equity.
The FinTech company is looking to introduce a ten-year term for a loan worth 50% of a home’s value.
Fraction co-founder and CEO Hayden James said, “We want to make managing your home equity as seamless and easy as booking a stay on Airbnb, and we are very excited to have QED joining to help us do that.
“In addition to expanding to the US, we are also building out an entirely new Loan Origination System (LOS) to be able to fundamentally improve upon the customer experience.”
Earlier in the year, Athena Home Loans reportedly raised $1.5bn in funding. The company is a digital lending platform that helps consumers get access to loans faster.
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