Clay Financial raises CA$1.7M now to launch innovative HESA

 Clay Financial raises CA$1.7M now to launch innovative HESA

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Toronto-based fintech startup Clay Financial Inc. has closed a pre-seed funding round, amassing CA$1.7 million. This funding will foster innovative solutions, allowing Canadians to tap into their home equity without selling or accruing debt.

The pre-seed round concluded in mid-August with private placements of common shares. Friends and former colleagues of the co-founders participated, bringing expertise in real estate, financial products, and capital markets.

Clay is introducing the Home Equity Sharing Agreement (HESA) – a first in Canada. This agreement lets homeowners turn part of their home equity into cash. In return, they share a part of their home’s future appreciation. This strategy eliminates monthly payments and protects existing equity. It stands as a flexible alternative to traditional debt products like home equity lines of credit and reverse mortgages.

Also read: Local Logic gets powerful US$13M boost for real estate tech

Clay’s HESA creates a new asset class, giving institutional investors unique access to the CA$6 trillion Canadian residential real estate market. This approach offers diversification, reduced volatility, and a hedge against inflation, bypassing the usual costs of residential real estate investments.

Clay Financial future prospects

Johnny Henderson, Co-founder and CEO of Clay Financial, expressed gratitude and excitement over the secured funding. He acknowledged the investors’ trust in Clay’s vision and team.

“We are thrilled to have secured such significant pre-seed funding from a group of investors who are not only financial supporters but also trusted advisors. Raising this substantial amount of capital during a challenging year for startup funding is a resounding vote of confidence in Clay’s vision and team.”

Johnny Henderson, Co-founder and CEO, Clay Financial Inc.

Clay will use the funds to develop HESA further, build a marketing engine, and expand its team. The company is preparing for a late 2023 launch in the Greater Toronto Area, presenting a new way for homeowners to access their home equity.

Canadian residential real estate market set to reach US$69.41 billion by 2028

A recent report published by Mordor Intelligence unveils a promising trajectory for the Canadian residential real estate market. The market, which is currently valued at USD 59.30 billion, is forecasted to reach a staggering USD 69.41 billion by 2028, growing at a Compound Annual Growth Rate (CAGR) of 3.20%.

The Canadian housing market experienced a mixed trend in August 2023, according to the latest report from The national average home price was $650,140 in August, dropping 3% from July but rising 2% year-over-year. The sales-to-new-listings ratio hit 56.2%, showing a balanced market. Seven provinces recorded a dip in home prices last month, yet three saw slight increases. Despite this, nine provinces reported a yearly price rise, except for Saskatchewan. The Bank of Canada’s rate hikes in June and July 2023, increasing interest rates by 50 basis points, drove these fluctuations, impacting home affordability and demand.

Clay plans to launch HESA in the Greater Toronto Area in late 2023. Homeowners can join a waitlist on Clay’s website.

Also read: Doormat raises CA$1.25M for better real estate legal service


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