Blockchain-based real estate platform Parcl is betting people want a piece of the real estate pie so badly customers are willing to invest in an emerging, small slice of the market: a digital square foot of real estate. Not only are customers investing in Parcl’s product, but the company itself also recently secured funding of $7.5 million from new and existing investors, which will help Parcl expand its customer base while bolstering partnerships with software and real estate companies, its co-founder said.
Existing partners led much of the funding, including Archetype, Dragonfly Capital and Solana Ventures. Fifth Wall, one of the largest venture capital firms focused on technologies for the global real estate industry, and JAWS, the family office of Barry Sternlicht, were among the new investors that helped raise funding.
Parcl’s business model is based on a price index that tracks the price per square foot in any city or state. The platform gives users exposure to markets and allows the blockchain to trade. The price index reflects eight different data points, including listing transactions, satellite imagery and property tax records, according to Trevor Bacon, co-founder of Parcl.
Currently the firm profits from transaction and starting fees; there are also plans to monetize its data in the long term.
“We’re the first blockchain-based real estate platform,” Bacon told HousingWire. “We’re not touching the physical asset. There’s been tokenized or factionalized real estate attempts, but those models don’t scale because you need to own the underlying properties.”
Because it does not require any liquidity in real estate to invest, Parcl targets all types of investors, including those who are priced out of the housing market and those who fear a potential recession.
Akin to advent of the internet, DTL platforms, DeFi, blockchain and related crypto tech are opening avenues to manifold business models that simply were difficult to imagine just a few years ago.
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“The housing market is very robust and … it prices a lot of people out of the market. That’s the kind of community we’re at least initially targeting – people who have been unfavorably impacted by the housing market because institutions are buying houses where there’s too little supply and inflation is driving the price up way too high for them to buy a home.”
Tech startups are capitalizing on the crypto boom to offer people to buy stakes in rental homes through blockchain-based tokens.
Several startups, such as Lofty AI, allow people to invest as little as $50 to buy a digital token equivalent to a stake in a property rental business. Industry observers say the emergence of new real estate marketplaces reflects a hot housing market that attracts more investors while pricing out many people seeking to buy homes.
As Desiree Fields – an assistant professor of geography and global metropolitan studies at the University of California, Berkeley – put it in an interview with NBC: “You can’t afford to buy a home yourself, but maybe you can become 1/50th of a landlord.”