At this time, Janover Ventures is asking investors to accept a pre-money valuation on the business of $45 million. This is twice the $20 million valuation of the company’s raise in December 2020, but Janover has gained notable traction since then. That said, the price is quite high in comparison to other startups currently seeking funding. Thus, the price score for Janover Ventures is low.

According to the Mortgage Bankers Association, commercial and multi-family mortgages issued in 2019 totaled $600.6 billion. Due to the COVID-19 pandemic, this figure plummeted to $395 billion in 2020, illustrating just how volatile the mortgage market can be over short time periods. That said, this industry has generally grown year after year. In aggregate, the Mortgage Bankers Association estimates that the total debt outstanding in this space is $3.82 trillion. Assuming Janover Ventures adopts a market-typical origination fee of 1.5%, its potential revenue could be around $9 billion annually. Over a complete financing cycle that sees a recycling of the $3.82 trillion in outstanding debts, this figure can be around $57.3 billion over the span of a few years. Because of the sizable and stable aspects of the market, Janover scores well in the market metric.

Janover Ventures has no fewer than seven individuals who are classified as either engineers or developers as well as other business development personnel. The company is run by founder and CEO Blake Janover. Prior to founding the company, Janover was the founder and CEO of B. Elliot Companies, where he worked for 17 years. At that firm, he focused on providing a full suite of real estate banking and brokerage services to clients. He has also served as an entrepreneur in residence at Florida Atlantic University. Plus, he has worked as an official member of the Forbes Real Estate Council. Given this extensive experience in the real estate market, the team score for Janover Ventures is quite strong.

While Janover Ventures owns a slew of web domains, its overall business model is fairly generic. Not only that, the company also has much competition. In addition to the individual lenders who engage in the services it offers, other players exist in the space, including other startups like StackSource. With little defensibility and a standard product offering, Janover Ventures scores poorly in the differentiators metric.

Janover owns several websites that are currently active and generate revenue. The business is no longer in the early stage of development but is instead in the expansion phase. Along the way, the enterprise has posted some impressive results. Through the end of 2020, for instance, the company saw $223 million worth of loans closed through its sites. Around $100 million worth of loan inquiries take place through its websites every day. In addition, the company is seeing impressive financial growth. Revenue in 2019 was $549,325 and grew to $1.56 million in 2020. The business also saw its net profit grow from $104,131 in 2019 to $319,025 in 2020, and operating cash flow grew from $132,464 to $362,806 over this time frame. Seeing positive earnings and cash flow for such an early-stage business is incredibly rare. In addition, according to management, in the six months ending in 2021, the business saw growth of 138% relative to the same timeframe a year earlier. Due to its profitability and continued growth, the performance score for Janover Ventures is its highest across all five metrics.

Fortunately for investors, the risk profile of Janover Ventures is at the low end of the scale. In fact, the only risk category that was elevated involved the company’s team. Though highly qualified, the team centers around just one key individual, its founder. A single-founder firm is inherently riskier than a multi-founder firm because losing that individual could be fatal to the enterprise. Because of this, the team risk rating was well above average.

Investors should take note of the fact that Janover Ventures is asking for a high valuation. It is hard to see, even with recent growth, a scenario where a more-than-doubling in valuation is warranted over such a short period of time. In addition, the revenue opportunity for the business is limited by the market being at the small end of the scale. On top of that, its product is not particularly unique and has significant competition. Last, the company’s future could be determined by the welfare of its single founder.

While Janover Ventures does operate in a small market, it is incredibly stable and should only grow overtime. The company’s financial performance has been impeccable, and the qualifications of its founder look robust. Overall, the risk profile for the enterprise is very low as well. 

Janover Ventures is offering a way to connect those seeking loans to the lender who could best suit their needs. The company’s financial performance has been promising so far, and the market is steady and growing. In addition to its low risk profile, Janover can also boast an experienced founder. However, having a single founder is a risk in itself. The market is still small at the moment, and Janover Ventures faces plenty of competition. Finally, the company is asking investors to accept a high valuation. Because of this, Janover Ventures is a Neutral Deal for the time being.

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Analysis written by Daniel Jones.