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Fraction has raised our Series A!

We've raised $20 million to fuel our expansion into the US market and to continue building out our product offerings.

Fraction

October 20, 2021

Blog overview

About Fraction

About QED Investors

Fraction, which has built a platform to help homeowners access their home equity, today announced it raised $20 million CAD ($16 million USD) in Series A funding. QED Investors led the round, whose partners are the ex-founders of Capital One, along with existing investors including Impression Ventures, Primetime Partners, Panache Ventures and Global Founders Capital. Notable angel investors of the round include the founders of Brex and the founding team of Bitso.

The new round of financing will be primarily used to fuel Fraction’s expansion into the US market and continue to develop its product offerings to provide even more transparency and flexibility for homeowners to manage their home equity.

Fraction is a fintech solution that enables homeowners to access the equity in their home with no monthly payments. The company’s clients have benefited from Fraction’s cash payments to reduce existing debts, invest in their home, buy a new home and cover unexpected expenses. Since launching in February 2021, Fraction’s clients have received an average of $350,000 from their home equity. This home equity loan is an improvement to the existing mortgage and home equity landscape, in that there are no required monthly payments, and the interest rate is based on the appreciation of your home.

“We want to make managing your home equity as seamless and easy as booking a stay on Airbnb, and we are very excited to have QED joining to help us do that,” says co-founder and CEO Hayden James. “In addition to expanding to the US, we are also building out an entirely new Loan Origination System (LOS) to be able to fundamentally improve upon the customer experience.”

Making financial products more fair and transparent is a priority for Fraction. The company currently offers its clients a 45 per cent loan to value (LTV) on a five year term and will soon be increasing this to a 35 percent LTV with the option of a 10 year term offer. With Fraction’s launch in new markets and expanded product offerings, they are also looking to hire various positions. If you are interested in joining the team at Fraction, see opportunities online at: https://www.fraction.com/careers. ‍

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About Fraction

Fraction is a fintech company offering a digital platform that provides socially conscious financial solutions. Fraction’s signature product empowers homeowners by enabling them to access the value locked in their homes without the need to make monthly payments, take on a new mortgage or erode their home equity. Clients can use the equity in their homes to increase their monthly income, buy a second home, trade an existing mortgage for one without monthly payments, and more. Fraction’s network of partners - financial advisors and mortgage brokers - can work with Fraction to provide their clients with an innovative and consumer-friendly mortgage alternative. Fraction is committed to using technology to create financial solutions that are fair for everyone. Learn more: https://www.fraction.com/.‍

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About QED Investors

QED Investors is a global leading boutique venture capital firm based in Alexandria, Va. Founded by Nigel Morris and Frank Rotman in 2007, QED Investors is focused on investing in early stage, disruptive financial services companies in the U.S., U.K., Latin America and Southeast Asia. QED Investors is dedicated to building great businesses and uses a unique, hands-on approach that leverages our partners’ decades of entrepreneurial and operational experience, helping their companies achieve breakthrough growth. Notable investments include AvidXchange, Bitso, ClearScore, Current, Creditas, Credit Karma, GreenSky, Kavak, Klarna, Konfio, Loft, Mission Lane, Nubank, QuintoAndar, Remitly and SoFi.

Fraction HELOC is available in WA with more states to come.

Equal Housing Opportunity

This site is not authorized by the New York State Department of Financial Services. No mortgage solicitation activity or loan applications for properties located in the State of New York can be facilitated through the Fraction site.

*Important Disclosures:

The interest rate for the Fraction Mortgage is calculated based on an Index, which is the Zillow Home Value Index (ZHVI), which is published at https://www.zillow.com/research/data/ on the third Thursday of each month. The interest rate at a given date during the term will be calculated as the change in the ZHVI from the initial date of origination up to that given date during the term. The minimum APR for a 5 year Fraction Mortgage is 9.37% and the maximum APR is 16.02%.
The Fraction Mortgage is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will match the interest rate of the existing principal.
Fraction charges an origination fee of up to 2.5%. If working with a broker, the origination fee for Fraction is 1.5% and you may also pay a broker fee up to 1.5%. You may also be responsible for paying recording fees, which vary by county, as well as inspection and appraisal fees, which vary by property.
Our loan amounts range from a minimum of $50,000 to a maximum of $1,500,000. Your maximum loan amount may be lower than $1,500,000 and will ultimately depend on your home value at the time of application. We determine your home value through independent data sources, automated valuation models, and third-party appraisals.
To check whether you might qualify for a Fraction Mortgage, we will conduct a soft credit pull that will not affect your credit score. However, if you continue and submit an application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
The Fraction Mortgage is a lending product with a fixed-term and secured against a property. Interest accrues over the term of the loan, with no monthly payments owed over the loan term. The Fraction Mortgage is available to homeowners over 18 years old. Fraction will accept applicants with a minimum FICO credit score of 640. An inspection may be required if your loan balance exceeds $1,000,000 and will cost approximately $750. Property insurance is required as a condition of the loan and flood insurance may be required if your property is located in a flood zone. Other taxes and government fees may be charged by your county and/or state. All fees other than the origination fee are paid to third parties and will be based on the actual cost of the services. The minimum and maximum term is 5 years.
Repayment is due at the end of the term and can be paid at any time up to and including the end of the loan term. Renewal options are available pending a new credit check and sufficient equity in the property.

Fraction has raised our Series A!

About Fraction

About QED Investors

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