CoFi, a US-based construction financing startup that helps builders access loans and pay workers quickly, has raised $7m (£5.3m) in a seed funding round led by Blackhorn Ventures, Metaprop, and Tenacity.
The company says it will use the funding to continue improving its payment technology, to perfect the origination and underwriting piece of its lending marketplace, and to help builders address the current housing supply crisis.
Through its software, CoFi enables builders to digitally collect invoices, handle inspections, handle lien waiver releases and pay workers via ACH transfer.
By using ACH transfer, the company is able to cut out the need to write checks, and reduces the time it takes to pay subcontractors from the industry-standard 74 days to just four.
Mike Lacey, co-founder of CoFi, said: “If you can pay those people and secure those payments quickly, how much more likely are you to get a subcontractor on your job site? CoFi is a solution that contractors are currently using to tackle those challenges of labor shortages and material shortages.”
CoFi also provides a construction loan marketplace, which includes hand-picked lenders and a strategically grown lender pool.
Cam Harris, another of CoFi’s cofounders, says that CoFi adds value to its partner lenders by not only “de-risking” payments on the back end but also using its technology to reduce work for them on the front end.
He says the company does this by combining its in-house credit team and its data to provide fully underwritten loans to partners, in turn expediting decision making and speeding up the overall process.
CoFi’s founders: Mike Lacey, Cam Harris and David Rockwood (Credit: CoFi)
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