Toronto-based fintech Clay Financial has closed a $1.7 million pre-seed funding round.
Clay helps Canadians tap into their home equity without selling or taking on debt. The funding will enable Clay to complete development of its product and platform, expand its team and fuel the company’s strategic growth plans.
Clay’s Home Equity Sharing Agreement (HESA) is the first of its kind in Canada, allowing homeowners to convert some of their equity into cash in exchange for a share of their home’s future appreciation.
With no monthly payments and no risk of eroding homeowners’ existing equity, the HESA is a flexible alternative to traditional debt products like home equity lines of credit and reverse mortgages.
Clay plans to launch its HESA in the Greater Toronto Area in late 2023 and has a waitlist open for interested homeowners.
With its HESA, Clay is creating an alternative asset class that offers institutional investors unprecedented access to the $6 trillion Canadian owner-occupied residential real estate market.
“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,” said Johnny Henderson, Co-founder and CEO of Clay Financial.
“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. We are grateful for the support and excited to accelerate our journey to revolutionize Canadian home equity.”