Company looking to launch home equity loan platform in the US and Canada
Fintech company Fraction Technologies has completed an equity and debt raise of CA$289 million (approximately US$227 million) from Impression Ventures, Primetime Partners, Global Founders Capital, and Panache Ventures, among others.
The funding, according to a Press release, will be used to prepare for the company’s launch in the US and Canada, as well as expanding its team and its flagship platform, Fraction Appreciation Mortgage.
The platform allows homeowners to tap into their home equity to increase their income or cover unexpected expenses. Instead of monthly payments, it offers a “reasonable interest rate” payable upon the sale of the home or when the homeowner decides not to renew. Fraction said that pre-launch interest had been exceptional, with over $20 million in demand from interested customers.
“Fraction aligns its interests with the homeowner. Upon the sale of the home, if the home value appreciates, Fraction shares in the upside, but if the home value decreases, there is a protected downside, which helps homeowners preserve their home equity,” said Hayden James, CEO and co-founder of Fraction. “With over $20 trillion locked in home equity in the US and Canada, no homeowner should be strapped for cash, struggling to pay for their child’s education, unable to pay bills during retirement or unable to help a loved one who has lost their job due to the pandemic.”
Fraction Chief Technology Officer Josh Baker claims that qualifying for a Fraction Appreciation Mortgage is more straightforward than for home equity loans or traditional mortgages. Baker said that they work together with mortgage brokers and other financial advisors to provide a “personalized” experience.
“The Fraction Appreciation Mortgage is ideal for older adults eager to age in place, but who are faced with insufficient retirement funds to cover the cost of their healthcare and other expenses,” said Abby Miller Levy, managing partner of Primetime Partners. “The Fraction team has designed the most consumer-friendly home equity product in the industry and is eager to help millions of homeowners remain in their home with financial peace of mind.”
