PeerStreet Launches Debt Fund for Covid-Era Opportunities

Real estate investment platform PeerStreet is getting in on the distressed-debt investment game.

Through its new Peer Street Credit Opportunity Fund, the El Segundo, California-based crowdfunding startup will enable investors to take advantage of pandemic market disruption by providing exposure to distressed debt, warehouse financing and subordinate investments, the firm said this week.

“This was the next logical step in the evolution of our marketplace and provides more options for different investment preferences,” co-founder and CEO Brew Johnson said in a statement. He compared the move to functionality offered by platforms like Robinhood or TD Ameritrade, where investors can invest in ETFs and mutual funds as well as individual stocks.

PeerStreet investors had previously only had the option to invest in individual loans, although some users had been creating their own “curated” funds with existing tools. “Some investors have made it clear that they would prefer to deploy larger amounts of capital at once into different strategies. We are giving them an easy way to do that,” co-founder and COO Brett Crosby said.

Last fall, the startup completed a $60 million Series C funding round and secured $4.25 billion in new capital commitments from institutions to purchase loans through its platform. The funding round was led by Colchis Capital, with Andreessen Horowitz, World Innovation Lab and Thomvest Ventures also participating.

When the coronavirus crisis hit in March, PeerStreet laid off 50 employees, according to layoff tracker Layoffs.fyi. The firm later received a $2 million to $5 million Paycheck Protection Program loan to retain 150 jobs. PeerStreet also paused loan buying in late March, and resumed residential bridge loan purchases in May following a review of market conditions.

Contact Kevin Sun at ks@therealdeal.com.