The co-founders behind Gumption are looking to change how commercial real estate deals get financed…one perfect match at a time.
From a user’s perspective, the commercial real estate (CRE) financing marketplace works like Tinder, AngelList, and other matchmaking or introduction-based platforms. But as a CRE-focused platform, Gumption connects borrowers and lenders based on their specific debt financing requirements. This helps developers finish restaurants, bars, grocery stores, and other retail-centric projects in more communities.
Right now, real estate developers have to be scrappy to find the right financing options. Gumption looks to streamline how they find those options.
The startup assesses important data points on what deal terms commercial real estate developers are looking for. It also looks at what portfolio requirements bankers have when looking at different CRE asset class opportunities. Deals are anonymized at the beginning, ensuring that highly-sensitive data isn’t shared. Later, robust financial documents and deal memos are shared when a bank expresses interest in the deal and their credit committee is ready to start the underwriting process.
To date, Gumption’s focus has been on Georgia, Tennessee, and Alabama deals, with more Southeast states starting soon.
Solving A CRE Problem
It is all about making the “entire process of getting [CRE] financing much more efficient and data driven,” said co-founder Jonathan Dickerson.
The reality is that CRE developers often struggle to find the financing options they need to complete a project, Dickerson told Hypepotamus.
“We talked to the one or two-person shops all the way up to real estate development companies that had hundreds of millions of dollars in their portfolio. And they were all saying the same thing. Now, I can’t rely on one or two loan officers to source all my financing deals.”
Dickerson and his team realized this CRE problem stemmed from several different areas. On a macro level, interest rate and credit volatility hurt a lot of banks post pandemic. That created a world in which loan officers and banks tightened what asset classes they would lend to.
“You have this need for financing. But it’s hard to figure out which bank will even entertain a financing deal for your property type without making hundreds of cold calls and emails,” he added.
On the other end of the equation, banks struggle to find deals that meet their ever-changing portfolio requirements and investing capabilities.
In the retail space, most deals are financed through small banks. But the problem is that the community banking system in the US is highly fragmented, with over 4,000 banks spread out across the country.
Right Team, Right Time
Dickerson is building Gumption alongside co-founders Tim Coy and Ward Neely inside of Chattanooga-based Brickyard.
Now, most Brickyard companies are from other parts of the country — or globe – and move to Chattanooga. Gumption is a rare Chattanooga-born startup that the VC has invested in.
Dickerson and Coy are no stranger to the Southeast startup scene. The two met while working as early employees at Bellhops, a Chattanooga on-demand moving marketplace startup. Neely brings more than a decade of experience in the CRE space.
Joining Brickyard is a bit of a full circle moment for the Gumption team. Brickyard, the venture capital firm and “insulator” that brings high-quality entrepreneurs under one roof, was started by Bellhops’ co-founders Matt Patterson and Cam Doody.
