RealBlocks, a technology platform that enables access to alternative investments, has secured a USD7 million in a Series A financing round, bringing its total investment amount to USD10.7 million. The round was oversubscribed and led by new investor Crosslink Capital, a prominent venture investor based in Palo Alto that manages over USD1.8 billion in AUM with a focus on B2B, fintech, and SaaS. The new capital will allow RealBlocks to scale its business development and engineering teams as the company races to meet accelerating customer demand.
RealBlocks launched in 2019 with the aim of providing open access to alternative investments – real estate, infrastructure and private equity and debt – while improving the investment experience for wealth managers, advisors, and investors. Through its blockchain-enabled platform, shares of alternative investment products are digitised and made tradable. This increases liquidity and improves access, which are the two largest barriers preventing mainstream investors from entering the market. The firm’s technology is now utilised by some of the most respected real estate, private equity and alternative investment managers in the world.
The RealBlocks platform has recently been utilised to create a 40 Act tender offer fund that provides financial intermediaries with access to an index fund that was previously limited only to institutions. This has allowed the fund manager to now reach an untapped downstream retail investor segment at a fraction of the cost of competing retail fund strategies.
RealBlocks is now being utilised by RIAs working through the Charles Schwab, Pershing, and Fidelity Platforms including Avestar Capital.
“RealBlocks has been a great partner in helping us invest in an alternative strategy quickly and easily,” says Mark Lebida of Avestar Capital. “Their unique software platform has created tremendous value for our clients by streamlining the processes needed to move them from agreement to execution.”
With alternative investments in high demand from investors, and regulators removing barriers to entry, the global market reached USD10 trillion assets under management in 2019 and is expected to reach USD14 trillion by 2023, according to Preqin. Despite this, the market is largely restricted to institutional and high net worth accredited investors.
“We are thankful for the ongoing support of our existing investors and excited to now be working with Crosslink Capital who has a great track record of unearthing category-defining companies,” says Perrin Quarshie, Founder & CEO of RealBlocks. “The Covid-19 pandemic has only intensified investors’ desire to access the alternatives market, yet it has also highlighted what a challenge it is to gain access to this market. RealBlocks addresses this issue by providing the distribution and trading infrastructure needed to unlock access to alternative investments for financial intermediaries. The additional capital from our investors will enable us to scale the RealBlocks platform as we continue to build a better alternative for the modern investment community.”
“RealBlocks has assembled the right team and built a fully deployable and turnkey solution that delivers time savings, cost savings and vastly reduced complexity to institutional alternative distribution,” says David Silverman, Partner at Crosslink Capital. “An analogy from the cloud world is that RealBlocks is providing the AWS technology platform for the complete legal, compliance and administrative components required by international financial asset distributors. As alternative fund managers ourselves, we believe that a huge gap exists in the market, and that RealBlocks is building an enormous, important company.”
