After creating a unique market for trading stakes in real estate investment funds, Realto is focused on the next phase of its development: landing partners to host its platform and raise awareness of its service.
The Overland Park-based company's online platform creates a secondary market where real estate investors can buy and sell interests in projects more easily.
Realto's platform, launched in December 2021, focuses on publicly traded entities, such as real estate investment trusts.
In May, Realto raised $4.5 million in venture capital from a group led by Overland Park-based Firebrand Ventures, with investments from KCRise Fund and other unidentified contributors. It was the company’s second capital raise, complementing $3.5 million it raised in December 2020 from a group led by local entrepreneur Gary Fish and JE Dunn Construction.
Since May, Realto has focused on populating its platform with buyers and sellers. The main focus is forming partnerships to get its platform on existing platforms populated with people who might be interested in Realto’s service.
“Over the last couple of weeks and months, our volumes have increased pretty dramatically, which is exciting,” Realto CEO and co-founder Brian King said. “We have a lot of early demand from buyers. We have hundreds of millions of dollars worth of buy-side interest in these products right now. But the biggest challenge we face, because we’re a new marketplace, is getting the message out there that we exist. The people who want liquidity just need to know that the liquidity is available.”
King said many of the funds it is targeting are anywhere from $2 billion to $70 billion in size, and didn't have as many options for selling assets. The need for such liquidity grew dramatically this year, he said, and should grow more with the prospect of a recession next year.
"When I say we’re providing liquidity, we are not a buyer or a seller. I want to make that clear. What Realto does is introduce sellers to buys and institutional investors who have a demand for these particular products,” King said.
The private real estate market is valued at more than $10 trillion in the United States alone, he said. So the potential market for Realto is huge.
King co-founded Realto in January 2020 with Jeff Kinney, a 26-year financial services veteran with experience raising equity capital for mutual fund companies like Invesco and Goldman Sachs.
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The information provided herein does not constitute an offer to sell securities or the solicitation of an offer to buy securities, which can only be made by the applicable offering document filed and registered with the appropriate state and/or federal regulatory agencies and sold by broker dealers authorized to do so. There is no guarantee that a market will develop for some securities, and as a result, they may remain illiquid.