Vancouver’s Fraction has raised a $20 million Series A funding round led by QED Investors along with existing investors including Impression Ventures, Primetime Partners, Panache Ventures and Global Founders Capital. Notable angel investors of the round include the founders of Brex and the founding team of Bitso.
Fraction is a fintech solution that enables homeowners to access the equity in their home. 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.
The new round of financing will be primarily used to fuel Fraction’s expansion into the US market and continue to develop its product offerings to provide even more transparency and flexibility for homeowners to manage their home equity.
The company’s clients have benefited from Fraction’s cash payments to reduce existing debts, invest in their home, buy a new home and cover unexpected expenses. Since launching in February 2021, Fraction’s clients have received an average of $350,000 from their home equity. This home equity loan is an improvement to the existing mortgage and home equity landscape, in that there are no required monthly payments, and the interest rate is based on the appreciation of your home.
“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,” says co-founder and CEO Hayden James. “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 this year Fraction raised $289 million in a combination of equity and debt financing.
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