TORONTO, Sept. 5, 2023 /CNW/ - Toronto-based fintech Clay Financial Inc. ("Clay") has successfully closed its pre-seed funding round, securing $1.7 million. Clay is building innovative solutions to help Canadians tap into their home equity without selling or taking on debt. The funding will enable Clay to complete development of its novel 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 aims to launch its HESA in the Greater Toronto Area in late 2023 and has a waitlist for homeowners open on its website (https://clay.financial).
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. HESAs allow investors to diversify their portfolios, reduce volatility and hedge against inflation without the traditional costs of residential real estate investments.
Clay closed its pre-seed round in mid-August with a private placement of common shares pursuant to the private issuer exemption in Ontario. Friends and former colleagues of the co-founders participated in the round. Clay's new investors bring a wealth of expertise in areas such as real estate, financial products, capital markets and go-to-market strategy.
"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 Inc. "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."
Looking ahead, Clay plans to use the funds raised to complete the development of its HESA, build its marketing engine, expand its team and begin originating HESAs. The company is gearing up for the launch of its HESA in the Greater Toronto Area later this year to give homeowners a new way to tap into their home equity.
SOURCE Clay Financial
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