Could transparency have prevented the housing crash? CrediFi thinks so – and may have the tech to back it up
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Photo Credit: CrediFi

Big data platform for commercial real estate finance CrediFi raises $8 million in Series A funding to be the Bloomberg for buildings. Investors are starved for information, says the company’s CEO

Big data company CrediFi, which provides information and analytics services for commercial real estate financing, has just received $8 million in Series A funding from Battery Ventures, Carmel Ventures, OurCrowd and several angel investors. The company previously raised a seed found for an undisclosed amount.

According to CrediFi’s CEO Ely Razin, commercial real estate is a particularly opaque market, and CrediFi’s goal is to change that.

“It’s a $3+ trillion financial market, but there is little regulation driving transparency,” he tells Geektime, “and longstanding ways that information gets shared — or in many cases, doesn’t get shared.”

Could a company like CrediFi have prevented the housing bubble?

CEO Ely Razin. Photo Credit: PR

CEO Ely Razin. Photo Credit: PR

While there are many explanations for what caused the 2008 housing bubble crash, there is consensus that regular homebuyers were unable to pay their mortgages, and that banks and other lenders had issued risky subprime mortgages perhaps due to a lack of transparency in the system as a whole. In its marketing material, CrediFi suggests that a service like its own could prevent future housing bubbles. This seems like a claim not even a Nobel-winning economist would be able to verify.

What CrediFi does offer is cloud-based data and analytics on key loan, financial, property, and market information for commercial real estate investors. Razin describes CrediFi as a “Bloomberg or Thomson Reuters” for commercial real estate.

“We provide enterprise-wide sales of data, under subscription contract, delivered over the web or by data feed.”

Razin says there are two reasons a big data service for real estate is particularly timely.

“First, the credit crisis made clear the great risk presented by this industry (as it was caused, in part, by CRE (commercial real estate)-related events) and second, the great opportunity of this space has recently been re-discovered by many financial players, who see CRE as a great and safe place to put money to work. As a result, information is now both more in demand, and more readily available.”

But realistically, in a world where big data is used in industries from e-commerce to shipping to transportation, the main reason to collect and sell data about real estate markets is because, simply, you can.

Ripe for disruption and starved for information

“CRE tech is one of the hot areas for VC investment in recent years,” Razin tells Geektime, “because the CRE market has been a laggard for so long.”

“Our company is focused on financial markets and their need for data to drive smart investment decisions.”

What separates CrediFi from other data brokers in the real estate industry, Razin says, is that “we are laser-focused on the needs of the financial markets that actually provide/invest most of the money that funds the CRE world. By contrast, other data providers in the CRE space are largely focused on the owners and brokers of the buildings, and not on the financial markets and investors. The financial/investor universe is global, deep-pocketed and starved for information.”

Razin says that CrediFi also has “proprietary risk & analytics models and produce unique CrediFi scores, which are asset analytics tailored to helping make big, multi-million dollar financial decisions.”

Big data meets big buildings

“Big data is transforming so many markets that it’s almost become a cliché — but if there ever was a market more ripe for data-based disruption, it’s the enormous and under-analyzed commercial real estate sector,” said Battery Ventures General Partner Scott Tobin, who has joined CrediFi’s board, in a statement.

“Right now, sector participants can access fragmented data about things like individual property details and lease information, but no one is offering this data in a single, integrated platform. CrediFi is stepping up to fill this void.”

Featured Image Credit: CrediFi

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Simona Weinglass

About Simona Weinglass

I’m an old-school journalist who recently decided to pivot into high-tech. I work in high-tech marketing as well as print and broadcast media covering politics, business culture and everything in between.

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