Fraction
Fraction makes it easy for people to invest in assets, without the need for a lot of money or expertise.
| Date | Investors | Amount | Round |
|---|---|---|---|
| - | investor | €0.0 | round |
* | $3.0m | Seed | |
| Total Funding | 000k | ||
Fraction Technologies Inc. operates as a technology-driven lending platform, established to provide homeowners with more flexible access to their home equity. The company was founded in 2018 by Hayden James, Josh Baker, and Rayan Rafay and is headquartered in Vancouver, British Columbia. The founding team's background combines serial entrepreneurship and technology, with CEO Hayden James having previous experience as a solutions consultant at realtor.com and founding Total Sports Tape Inc., and CTO Josh Baker bringing expertise from software engineering roles at Brex and Method Studios.
The firm’s core offering is the Fraction Mortgage, a financial product structured to allow homeowners to access their property's equity without incurring monthly payments. This model targets individuals looking to pay off higher-interest debt, cover significant expenses, or make new investments by leveraging their primary asset. The loan's interest rate is tied to the home's appreciation, aligning the cost of borrowing with the asset's performance. Fraction generates revenue through origination fees, which can be up to 2.5% of the loan amount, and clients may also incur costs for appraisals and recording fees. The product is structured as an open-end line of credit, with the full amount available at origination, and borrowers can make additional draws against the repaid balance during the draw period.
Since its public launch in early 2021, Fraction has secured significant capital to fuel its growth. The company raised over $250 million from a diverse group of international investors, including a notable Series A funding round of $20 million CAD led by QED Investors. This capital is being deployed to expand its footprint into the U.S. market and to further develop its proprietary Loan Origination System, aiming to enhance the customer experience. The company reports that its solution has helped homeowners reduce their debt-to-income ratios by up to 50% and increase their credit scores by an average of 30 points.
Keywords: home equity, mortgage lending, fintech, real estate finance, no monthly payment mortgage, HELOC alternative, property technology, home equity loan, asset-tied lending, financial solutions, residential real estate, debt consolidation, property appreciation loan, venture capital-backed, Loan Origination System (LOS), home equity access, financial services, Canadian fintech, US expansion, homeowner financing