Yieldstreet Raises $100M to Expand Investment Opportunities for Millennials

by Jeremy Porr
June 2, 2021
On Yieldstreet, users can invest in areas previously reserved for institutional investors. The platform provides users with the opportunity to invest in things like real estate, fine art, legal finance and commercial loans.
photo: yieldstreet

Maybe you’re looking to diversify your portfolio or maybe you have no idea what that means. Either way, Yieldstreet is here to help. The New York-based fintech company provides retail investors with access to alternative investments.

Both the number of investment requests and the number of new investors on Yieldstreet’s platform surged last month, each up over 250 percent over 2020. Now the company is receiving a massive investment of its own to support its rapid growth.

On Wednesday, Yieldstreet announced that it raised $100 million in fresh financing. The Series C was led by former E*Trade CEO Mitch Caplan, of Tarsadia Investments.

The types of investment opportunities you’ll find on Yieldstreet were previously only made available to institutional investors. On Yieldstreet, users can invest in things like real estate, fine art, legal finance and commercial loans. Typically, retail investors are limited to stocks and bonds while alternative investment areas are reserved for hedge funds and billionaires.

“The 60/40 investment model is over; you simply can’t retire on bonds yielding less than 2 percent, so alternatives are not optional but needed for every portfolio,” Caplan said in a statement.

Yieldstreet aims to provide retail investors with an opportunity to diversify their portfolios at a more accessible price point. Investment entry points on the platform are as low as $1,000.

With more and more people under the age of 35 interested in making investments, it’s no wonder why platforms like Yieldstreet are seeing a surge in popularity. Today, one in three Millennials are investing in the stock market, according to Investopedia.

“We’re on the brink of the greatest wealth transfer in history as Baby Boomers pass the torch to new generations. The consumer has changed, yet the tools and infrastructure in wealth management haven’t kept pace,” Milind Mehere, founder and CEO of Yieldstreet, said in a statement.

It’s also clear that these digitally savvy younger generations are having a pronounced impact on the market. Look no further than viral moments on the internet like the GameStop controversy or the massive dip in the price of dogecoin after Elon Musk appeared on Saturday Night Live for proof.

While the average age of people investing in alternative assets is typically around 65, Yieldstreet’s average user age is in their 30s, Michael Weisz, president, founder and chief investment officer of Yieldstreet, told CNBC.

“It’s a new world — a mobile-first digital one — so we’ve created a platform to eliminate the built-in friction points to better connect with consumers wherever they are, help educate and provide access to investments to fuel their life goals,” Mehere continued.

Since its founding in 2015, Yieldstreet has funded over $1.9 million in investments. The company plans to use the additional capital to expand its user base, develop new products and pursue strategic acquisitions as the company explores international expansion. It is also reportedly eyeing a public offering in the near future.

Additionally, Yieldstreet is planning to expand the size of its team as it continues to scale. The company is now hiring for dozens of open positions across its engineering, finance, operations and product teams, to name a few.

Yieldstreet has raised $278.5 million in venture capital financing to date, according to Crunchbase.

Additional investors Kingfisher Capital, Top Tier Capital Partners and Gaingels participated in the round, among others.

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