Just days after publicly traded real estate tech firms Redfin and Compass laid off more than 900 employees combined, another proptech – HomeLight — announces that it has obtained $60 million in capital and $55 million in debt financing.
HomeLight’s latest $60 million capital raise is an extension of the company $100 million Series D which was announced last September. At that time, HomeLight was valued at $1.6 billion. With the extension, the Scottsdale, Arizona-based company has raised a total of $645 million since its inception in 2012 and is valued at $1.7 billion. Notably, existing investor Oren Zeev contributed the full $60 million.
“This fundraising and acquisition allows us to play both attack and defense – expanding our business while positioning the business to weather uncertainty this year and next,” Drew Uher, founder and CEO of HomeLight, told TechCrunch.
The company also announced today the acquisition of Accept.inc, a Denver-based lending startup, in an all-stock transaction for an undisclosed amount. The deal is expected to close in the coming weeks. Accept describes itself as an iLender, or “technology lender” that gives people a way to submit cash offers on a home when they qualify for a mortgage. In June 2021, TechCrunch covered news that Accept had secured $78 million in debt and $12 million in equity. SignalFire led the equity portion of its funding, which also included participation from existing seed investors Y Combinator and DN Capital.
“With our latest acquisition, HomeLight becomes the largest agent-focused power buyer in the country,” the company said in a statement. “Bringing Accept.inc into the HomeLight family is a strategic move that will allow even more of HomeLight’s premier agents and their customers to benefit from the power, speed and certainty of wireless transactions. unforeseen.”
Over the years, like many other real estate technology platforms, HomeLight has evolved its model. HomeLight’s initial product focused on using artificial intelligence to connect consumers and real estate investors with agents. Since then, the company has grown to also providing securities and escrow services to agents and door-to-door sellers and corresponding sellers with iBuyers. In July 2019, HomeLight acquired eaves as an entry into the (increasingly crowded) mortgage space.
In January 2020, HomeLight launched its flagship financial products, HomeLight Trade-In and HomeLight Cash Offer. By April, HomeLight Cash Offer — which operates in California, Colorado, Arizona, Florida and Texas — had seen 500% year-over-year growth in transaction volume, Uher said. And in the first quarter of 2022, HomeLight and Accept.inc accounted for over $3 billion in combined referral transaction volume.
“Our initial goal was just to remove as much friction as possible for agents as well as their clients, but as the market has become more volatile over the past two years,” Uher told TechCrunch, “it’s become one of the most crucial tools agents would use to compete and win in their local markets.
Uher believes HomeLight’s latest rise is an example of a new world “where stable valuations are the new trend.”
“It’s a testament to the strength of our business,” he said.
Acknowledging the difficulties other players in the space are currently facing amid rising mortgage interest rates and a general slowdown in the housing market, Uher added that HomeLight is “watching the burn closely.”
“We’ve slowed down hiring until the end of the year,” he told TechCrunch. “…We continued to prioritize strengthening our operations, profitability and track to prepare HomeLight for the best possible future.”
As for the decision to acquire Accept, Uher said it was based in part on the fact that more companies have recently entered the proptech space with the aim of helping buyers and sellers with various aspects of the buying and selling process and that HomeLight wanted to be even more competitive.
“Our goal over the past year has been to focus on strengthening our flagship financial products to enable our agents to continue to compete and win,” he told TechCrunch. “We recognize how cash continues to be king for buyers and sellers in today’s market, and saw an opportunity to partner with one of the major players dominating the cash offerings market. “