Lev Closes $10M Seed Round Backed by JLL Spark and LoopNet, Trulia Founders
It took about two weeks for fast-growing commercial real estate finance brokerage and technology company Lev to close on its $10 million seed funding round, the company’s founder, Yaakov Zar, told Commercial Observer.
“It went very quickly,” Zar said. ‘We closed in the second week of February. We had a term sheet within two weeks. I expected it to take three months.”
“Maybe I underpriced it, who knows,” Zar quipped. The company, which was founded in 2019, nabbed commitments from leading proptech and fintech investors and innovators; venture capital firms NFX, Canaan Partners, JLL (JLL) Spark and Cross River Bank; as well as from two of its previous lead investors, Animo Ventures and Ludlow Ventures.
NFX led the investment, which was spearheaded by the firm’s General Partner Pete Flint, who was previously a co-founder, chairman and CEO of online real estate listings platform Trulia. Canaan Partners General Partner Rich Boyle was also at the table; he’s the former chairman and CEO of the massive, online commercial real estate marketplace, LoopNet.
“Maybe this is an exaggeration, but Pete and Rich invented online real estate listing, along with Zillow,” Zar said. “LoopNet was one of the first for online listings for commercial real estate or, at least, initiated it being online. The challenges we’ll face aren’t unlike what LoopNet and Trulia experienced in the early 2000s.”
The roster of investors and the speed at which Lev secured the seed funding is a testament to the growth of the fintech and proptech spaces amid the pandemic, as the real estate industry gradually adapts to new challenges and advances technologically.
“I think they realize there’s been a massive lack of innovation in the space, and they realize there’s an ability to rebuild it,” Zar told CO. “But, you can’t get rid of the human [element]. What if Uber didn’t launch until they had autonomous cars? It’d take a long time to get there. We’ll automate it more over time as the product and tech evolves. The commercial mortgage process isn’t still mostly manual due to a lack of tech; it’s a people process. It’s about having a combination of market leading tech and the right people.”
Lev, which was founded in Manhattan in 2019, combines human capital and commercial real estate expertise with artificial intelligence, allowing investors and lenders to customize and quickly build out a desired capital stack for any given transaction.
It went into 2020 hoping to close anywhere from $200 million to $300 million in new financings, but it only managed to facilitate $100 million worth of deals, mostly due to a sluggish capital markets landscape caused by the pandemic.
Despite that, Zar said last year “turned out to be a fruitful year for [us], and that we’ve been able to win customers and partnerships because of our innovative technology and top-notch execution. Now, we have the resources and team we need to leverage the industry’s recovery as a powerful engine of further growth.” This year, Zar expects the company will reach $1 billion worth of deals closed, he said. It works with a variety of clients and users, ranging from smaller, private, commercial real estate investors to larger institutional shops, and it can dabble in every asset class across the country.
“As so many transactions move online, we believe there is a huge opportunity to evolve the commercial real estate transaction,” NFX’s Flint said in a statement. “The team at Lev have proven that they have the vision and skills to drive this change. With their strong traction with customers and partners, we’re really excited about building a compelling technology platform for the industry.”
Lev has been expanding as of late, adding more and more seasoned commercial real estate veterans to its roster, including Avison Young’s Amanda Saltzman and JLL’s Greg Goldstein, who recently joined to lead the company’s West Coast expansion — it just opened its second office in the city. It now sports a team of 30 capital markets and technology professionals.
“Lev is transforming commercial real estate financing in ways that are similar to what LoopNet did to property marketing and discovery 20 years ago,” Canaan’s Boyle said. “They are applying technology to bring transparency and efficiency to a massive market for the benefit of both borrowers and lenders in the commercial real estate space. I’m excited to have the opportunity to share some of those lessons from our experience with a team as innovative as Lev’s.”