Vancouver’s Fraction Technologies has raised $289 million in a combination of equity and debt financing from Impression Ventures, Primetime Partners, Global Founders Capital, and Panache Ventures, among others.
In contrast to reverse mortgages and home equity loans, Fraction’s flagship product, the Fraction Appreciation Mortgage, has no monthly payments. Instead it offers a reasonable interest rate payable upon the sale of the home or the end of the contract, aligning interests with the homeowner.
Upon sale of the home, if the home value appreciates, Fraction shares in the upside, but if the home value decreases, there is a protected downside, which helps homeowners preserve their home equity
The equity raised today will be used to launch in Canada, expand its team and technology platform, and prepare for its launch in the United States.
“Fraction aligns its interests with the homeowner. Upon sale of the home, if the home value appreciates, Fraction shares in the upside, but if the home value decreases, there is a protected downside, which helps homeowners preserve their home equity,” said Hayden James, CEO and co-founder of Fraction.
“With over $20 trillion locked in home equity in the U.S. and Canada, no homeowner should be strapped for cash, struggling to pay for their child’s education, unable to pay bills during retirement or unable to help a loved one who has lost their job due to the pandemic. It is a common story to own your home but be barely able to afford anything else.”
Fraction’s team includes North American fintech leaders such as COO/CFO and co-founder Rayan Rafay, previously CFO/COO and Chief Investment Officer at Unison, and outside-General Counsel Sara Priola, who was previously a co-founder at the fintech unicorn, Figure.
“Qualifying for a Fraction Appreciation Mortgage is more straightforward than for current products available in the market. We created Fraction to make it fast, easy, and transparent to access your home equity,” said Josh Baker, CTO and co-founder of Fraction.
“We also work hand-in-hand with mortgage brokers and other financial advisors to provide a personalized, high-service experience.”