Building the Future: Our Investment in Affordable Housing Innovation
The Artemis Fund believes technology has the opportunity to sustain prosperity for all, but it’s not possible without diverse perspectives. Artemis leads seed rounds for diverse tech founders with wild ambitions in fintech, commerce, and care building the economy of the future.
If you’re looking to buy or rent a home, the housing shortage is probably not news. Increasing materials costs, supply chain disruptions, and labor shortages aggravated by the COVID pandemic have all contributed to a decline in housing inventory. However, it’s crucial to note that this issue predates the pandemic, underscoring a systemic failure in the United States to meet the housing needs of its continuously growing population.
To solve the affordability crisis, 7.3 million affordable rental units must be built, renovated, and climate-proofed within the next decade.
We believe the affordable housing problem is solvable and the time is right for disruption. Artemis is excited to announce that we recently led the Seed round for Builders Patch, an AI-powered platform for multi-family housing finance. Existing investors include 10one10, Urban Innovation, GovTech Fund, and Third Sphere.
After dedicating nearly twenty years to affordable housing finance, Kanan Ajmera, CEO of Builders Patch, found herself exasperated by the unnecessarily convoluted and prolonged procedures that caused distress for lenders and developers involved in financing housing projects. That’s where Builders Patch comes in.
In 2022, the 25 largest affordable housing lenders provided more than $64.6B in construction and permanent loans to affordable housing developments.
The Opportunity: To complete a loan, multiple lenders and lender types work on the same project across a variety of tools, resulting in a highly inefficient, error-prone, and expensive process. Multiple sources of funding need to be pooled together to finance a new development project. The process of applying for funding on the borrower’s side, underwriting and disbursing funding on the lender’s side is a lengthy, cumbersome process. Workflows can often be labor-intensive and dependent on legacy tools that haven’t upgraded in years.
The Solution: Builders Patch brings developers, lenders, HFAs, and CDFIs onto a single platform, streamlining loan applications and enhancing borrower experiences with due diligence templates, document collection and storage, automatic memo generation, and custom analytics and reports. The company is helping lenders disburse capital to borrowers, who will ultimately use the funds towards energy retrofits, renovation, and weatherization.
The U.S. economy suffers from a $2T annual loss in wages and productivity due to affordable housing shortages.
The Impact: Increasing access to affordable housing is the most cost-effective strategy for reducing childhood poverty and increasing economic mobility in the U.S. The absence of affordable housing prevents millions of individuals from one of the most necessary steps for building wealth: buying a home. For many others, the imminent risk of homelessness due to lack of access to safe and affordable housing remains a constant concern.
The Builders Patch team is addressing housing affordability and the climate crisis head-on: a mission Artemis can get behind.
Learn more about the companies in our portfolio on our website. If you’re a founder innovating in commerce enablement, fintech, or the care economy, pitch us here!
