Built Technologies successfully completed a capital raise, enabling the three-year company to expand its software offerings for both commercial and residential construction lenders.
The Nashville-based company raised $21 million in a Series A investment round led by global venture capital firm Index Ventures, with an additional contribution from Nyca Partners, a fintech-focused venture capital firm based in New York.
This new series A brings the total capital raised to date by the company to $25 million.
"Built is poised to completely transform construction lending,” said Mark Goldberg, Investor at Index Ventures, in a press release. "This is a massive industry that has been bogged down by cumbersome, pen-and-paper-based processes. With their software platform, Built is making construction lending faster and safer. We’re excited to partner with them to bring construction lending into the 21st century."
Built plans to advance technology across residential and commercial construction lending, and invest heavily in data utilization with the new capital, which will also support continued integrations and partnerships with other lending technology systems and industry service providers.
The real work on a construction loan doesn’t begin until after the loan closes, as this loan type requires constant monitoring of the asset being built with "draws" taking place until the project is completed, according to the company.
"Current lending technology just wasn’t designed to handle the nuance of how construction lending operates," according to a Built blog by CEO and cofounder Chase Gilbert. "As a result, loans often live on spreadsheets outside of the other systems a lender uses until construction is complete."
Among the main reasons innovation in construction lending has lagged is because construction loans are a decently small segment of total assets for most lenders. But "construction finance is the lifeblood of the entire $1.2 trillion U.S. construction industry and impacts everything from housing and commercial real estate availability and affordability to job growth and GDP," according to Gilbert.
Other reasons for slow growth in construction lending innovation include the differing state laws that impact these loans, and that different types of construction loans have varying requirements depending on how they are serviced.
"Built was born out of our own first-hand frustration of managing construction loans and a complete belief that it could be done better with technology,” said Gilbert.
"This investment is very exciting because of what it means to our clients, the entire construction lending industry, and all the affected stakeholders. This is an area of lending that has been underserved for far too long and we know we can change the way the world gets built by making it easier for capital to get safely deployed," he continued.