Happy New Year (and happy new decade) to you all! All of us at Groundfloor are excited about our plans for 2020. Before the new year gets too much further underway, though, let’s take a look back at the progress the company made in 2019. From total investments and interest paid to loan originations and principal repaid, 2019 was another record year that set the stage for even more to come this year. Check out our graphical summary below to put it in perspective.
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Investor Activity
Our community continued to grow and spread the word about Groundfloor's innovative investing platform in 2019. Individual investors made over $100 million in investments on our platform in 2019, more than doubling our total from 2018. We hit 75,000 registered users on our platform, and investment volume in LROs grew by 62% from the prior year.
The number of investments on our platform grew by 114%, from 143,611 in 2018 to 307,586 in 2019; and the average number of investors per loan shot up to 535.
Loan Originations
We continued to scale up our lending operations this past year. With over 640 projects funded in 2019 alone (an 89% increase from 2018), we offered our investors an unprecedented array of loan yields, grades, and types, allowing greater portfolio diversification opportunities on our platform. Our loan origination dollar volume also increased dramatically from $55 million to almost $115 million (a 110% increase), with the average loan size increasing to $177,371. To date, we have originated over 1,350 loans since our inception.
Interest Paid
We repaid over $3.3 million in interest on 346 loans to our investors in 2019. On an annualized basis, we delivered a 10.60% average rate of return1 on over $52 million in principal for the entirety of 2019. Our underwriting and asset management teams continued to perform well, with only 9 of 346 loans repaid in 2019 subject to fundamental default and 105 subject to workout.2 For more information about the performance of our loans up until August 2019, please refer to our most recent diversification analysis.
These numbers tell just part of the story. 2019 also saw some important, foundational strides made that continue to bolster the long-term growth and expansion of Groundfloor.
Product Expansions and Improvements
We continued to diversify and improve upon our product offerings in 2019. In Q4, we successfully launched Self-Directed IRA accounts, one of our most requested investment features, and feedback has been extremely positive with more than $3.5 million new funds transferred into Groundfloor IRAs in the launch quarter. We also introduced an investor referral program, which continues to be an important source of new investors. Over the course of 2019, 1,029 investors signed up and transferred new funds into the platform through the referral program.
On the lending side of our business, we built and launched QC Maxx, a new pre-approval program designed to facilitate closing and eliminate surprises in underwriting. Through this program, real estate investors get pre-approved for a business line of credit based on the results of a comprehensive credit and background check, business entity verification, and third-party validation of their fix and flip experience. Over 200 people have completed their application for QC Maxx pre-approval since its launch in late September, and 120 of them have already been pre-approved. These real estate investors have already begun to put their pre-approval to the test -- in 2019, we received 47 loan applications from individuals pre-approved through QC Maxx. To round out changes made on the lending side, we launched a new, more streamlined online loan application as well as a “loan tracker” feature on our site. All of these additions have been met with an overwhelmingly positive response: we have already seen the number of loans per borrower increase, and borrower satisfaction scores are exceeding industry benchmarks and continuing to rise.
Company Expansion and Honors
Our efforts and investment in 2019 not only resulted in record-setting performance and continued company growth, but also were further validated with several awards celebrating our innovation and business results. Groundfloor achieved a 112% increase in our year-over-year revenue last year, and we continued to hire employees to help build out our team, specifically in key departments such as sales, marketing, and asset management. In fact, at the end of last year, we reconfigured our entire office layout to accommodate our 10-15 new hires, with plans to continue growing the team in 2020. Groundfloor and CEO Brian Dally were honored with several notable awards in 2019, including the best crowdfunding platform with the Fintech Breakthrough Award, the Technology Association of Georgia's Fintech ADVANCE Award, the Atlanta Business Chronicle Pacesetter Award, TiE Atlanta Entrepreneur of the Year award, and a Golden Bridge award for Startup of the Year. In total, Groundfloor received nine major industry awards.
While we appreciate this recognition, we measure our effectiveness through validation from our lifeblood: our customers. As such, we implemented quarterly customer satisfaction surveys in 2019 to establish an initial baseline of customer sentiment and then measure it on an ongoing basis. Overall, our customers are extremely satisfied, giving us an average satisfaction score of 8.2 -- a significantly higher score than lending and investment product industry benchmarks. Groundfloor is committed to a service-oriented culture, and our teams digest the qualitative feedback to continuously guide customer-centric service and product improvements with the intention of improving these scores.
Fundraising
In January 2019, we launched the second round of our online public stock offering and raised $3.0 million. We are proud to report that 20% of our company is now owned by 3,160 public shareholders. We raised an additional $3.7 million via a convertible debt note in Q4, bringing the total funds raised in 2019 to $6.7 million. This financing was put to immediate use addressing hiring and marketing needs, expanding product development, and continued regulatory development to support new features, offerings, and enhancements to our innovative investment products.
Whether you’re an investor, borrower, partner, or friend, we thank you for your continuing support and interest, and invite you to participate by posting comments and questions below, emailing us directly at founders@groundfloor.us, or contacting our support staff at support@groundfloor.us.
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