We’re excited to announce our investment in Ease Capital alongside a group of strategic FinTech investors and executives that includes Brewer Lane Ventures, Cambrian, Vera, and Mischief. Nine Four Ventures is thrilled to partner with Charlie, Ryan, Memo, and the entire Ease Capital team on their mission to streamline institutional capital investment and elevate borrower experiences in CRE lending.
Here is a bit more about the business, opportunity, and why we invested:
Who is Ease Capital, and what do they do?
Ease Capital is building a streamlined, end-to-end lending platform that allows institutional capital access to markets that have been historically challenging to participate in. The company’s strategy is to align on a credit grid to which they diligently source, underwrite, close, and effectively manage assets. Ease made a recent announcement here that outlines their general positioning in the market and shared details about their relationship with strategic partner Taconic Capital Advisors. They’ve built cloud-native infrastructure focused on providing rigorous upfront diligence and risk assessment to reduce underwriting costs, improve pricing, and offer better experiences for borrowers and institutional capital allocators (it’s worth noting that over 97% of multifamily properties in the United States are financed with loans under $30 million[1]).
What is the market and opportunity?
Certain segments of CRE lending have historically been challenging to access and streamline, which led to those segments being generally underinvested in. The fixed costs associated with originating, underwriting, and servicing loans makes it tough to deploy large quantities of institutional capital efficiently, and subsequently forced larger players to focus on larger transactions. As a result, many of the biggest lenders, institutional investors, and asset managers were forced to ignore the longer-tail of the market and the potential it may hold in providing a diversified sub-asset class. In terms of size and scale, there is over $300B of annual small balance multifamily lending in a steady-state market, with the industry currently contending with a trillion dollars of debt[2] that has refinancing needs.
This capital markets opportunity is usually filled by regional banks and credit unions. However, things changed when the recent banking crisis drove those regional banks and credit unions to tighten their belts and skew to more conservative cash reserves and balance sheets. This structural shift created an attractive opportunity for Ease Capital to take advantage of by leveraging its technology to originate loans efficiently and enable the deployment of larger amounts of institutional capital in a way that was previously not possible by private capital sources (for now).
Why invest?
Nine Four believes that the shift to private lenders is a meaningful and durable shift in the market, and that this renewed opportunity for private lenders to deploy capital invites technology-driven solutions to be built and deployed. Ease Capital’s strategy and roadmap delivered on this thesis, and we found that the team had deeper understandings and experience in the space than what we thought possible.
We also understand the importance of investing in an impressive team in the earliest stages of a company’s formation and launch (note that the executive team structure and makeup is always critical, but we find it even more pronounced in the earliest stages where everything is malleable). In this case, Ease’s team stood out from the get-go. Ease was founded by a veteran group of experienced PropTech founders including Charlie Oshman, Memo Sanchez, and Ryan Simonetti. When we met Charlie, Memo, and Ryan, it was immediately clear that we shared a common vision for the future, this is what the industry needs, and that they are the best people to build it. Charlie and Memo previously co-founded Reonomy, a CRE data company startup that Altus Group acquired for $200M, and have extensive backgrounds in structuring and leveraging CRE data across disparate sources. Ryan founded Convene, the global hospitality company, and brings meaningful capital markets knowledge and relationships to the table.
We believe our relationship with Ease Capital highlights and reinforces our strong desire to work with and support founders at the earliest stages of company building. As a strategic investor, we look for opportunities where we have a unique knowledge or distribution advantage and can help founders grow faster and more capital efficiently. After investing in Charlie, Memo, and Ryan pre-everything, we immediately plugged them into our network for product feedback and connections to potential customers, vendors, talented startup operators, and capital partners.
We’re excited as the company executes on what we believe is a bold and ambitious roadmap. If you’re interested in joining Ease Capital, they’re hiring! Congrats again to Charlie, Memo, Ryan, and the entire team. We’re just getting started!
Disclaimer:
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by Nine Four Ventures. All views expressed herein are the opinions of Nine Four Ventures employees and are not the views of our affiliates or investors.
[1] Reonomy CRE Data – Accessed Nov. 2023
[2] MBA 2023 Q2 Databook – Sept. 2023
