Arrived, a real estate investment startup that allows fractional investment by individuals, has locked in $27M from the top seats of tech giants.
Backers include Bezos Expeditions, Core, Forerunner Ventures and the CEOs of Salesforce, Uber and Match Group. The platform has now raised $60M in total, including $25M from a Series A round in 2022.
Arrived purchases single-family and vacation rentals for investors to buy shares in. Quarterly dividends are earned from rent, as well as a slice of appreciation if a home is sold after a holding period. It takes on the financing, property management, renovations and tenant relationship management for the houses.
The company’s portfolio is spread across 65 U.S. markets and consists of 550 properties. Roughly $340M has been invested from 900,000 registered users on the platform, and it has paid out $55M since its inception in 2019.
Arrived’s founders say its platform is a “stock market for real estate” and allows people outside of real estate to gain exposure without having to take on a full mortgage or property management duties.
Its money is earned from a quarterly or annual assets under management fee for investors, a rebate when Arrived buys a new home and a one-time acquisition fee when it buys an asset and raises capital from investors.
Rather than funding individual assets, investors also have the option to buy and sell shares of rental homes from each other or pool their resources into a city-based fund to gain exposure to an entire metro’s housing market.
The fractional real estate investment business model has come under fire in recent years.
Already turbulent housing affordability can suffer from turning single-family homes into investment targets, and investors snapping up homes can further pull supply away from individual ownership.
Disgraced fractional investment platform Landa started the same year as Arrived, but its trajectory underscores the weaknesses in the system.
Landa had acquired nearly 300 homes and raised $35M by 2022. The company borrowed heavily against its homes, but in 2024, it all went sour.
The startup’s investors couldn’t access their payouts, and more than half of the properties with sold shares weren’t paying dividends. Some investors feared a total loss, and residents weren’t faring much better.
Tenants said their homes suffered from neglect, poor maintenance and shoddy communication from their landlord.
With Landa bleeding cash and unable to pay investors or creditors, a judge in late 2024 ordered 119 homes in Landa’s portfolio to be turned over to an independent manager, including rents, bank accounts and operations.
The new property manager is B. Riley, which has the right to sell the homes and use the funds to pay off $35M in outstanding debt Landa owes to lenders.
