Digital investing platform Yieldstreet has raised $100 million in a Series C round led by Tarsadia Investments, the company said Wednesday.
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Yieldstreet lets users invest in alternative assets such as portfolios of single-family homes or portfolios backed by art assets. The idea behind the company is that the traditional 60/40 rule of investing 60 percent of one’s assets in stocks and 40 percent in bonds isn’t diverse enough, and that more than the ultra wealthy should have access to alternative investments.
“The reason this problem is so important is that access to and distribution of alternatives is fundamentally broken, and that’s adding to the income opportunity gap we talk about,” CEO Milind Mehere said in an interview with Crunchbase News.
While Yieldstreet was founded six years ago, Mehere had the idea for it around 12 years ago during the financial crisis. Mehere moved to the United States as a student, found success as a professional, and followed the 60/40 rule for investing. So when the global financial crisis hit and his portfolio was down, he found himself a bit angry at Wall Street.
“I had done everything right of what I was told as a consumer … and I was left holding the bag,” he said.
The New York-based company aims to help modernize users’ portfolios to complement their stock market portfolio, Mehere said. Tarsadia Investments President Mitch Caplan echoed the sentiment in a statement, adding that “alternatives are not optional, but needed for every portfolio.”
“In today’s time, it’s even more important (to invest in alternatives),” Mehere said. “If you think about it, the stock market is at an all-time high, but if you look at the last 18 months, the market is so volatile.”
The funding will be used to double down on growth, including expanding Yieldstreet’s user base and its products. The company will be pursuing strategic acquisitions, with going public as part of its plan in the next 12 to 24 months, Mehere said. The company has about 300,000 users on its platform, with its investment requests up 250 percent year over year (year to date).
Yieldstreet last raised money with a $62 million Series B in February 2019. Other participants in the Series C round include Kingfisher Investment, Top Tier Capital Partners, Gaingels, Edison Partners, Soros Fund Management, Greenspring Associates, Raine Ventures, Greycroft and Expansion Venture Capital.
Illustration: Dom Guzman
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