A Palo Alto, California-based fintech startup Point, which bills itself as allowing homeowners to tap into future home appreciation, closed on a $115 million Series C funding round, the company announced Tuesday.
Point now says it has raised $170 million in equity capital.
WestCap Group, a New York City-based investor, led the funding with existing backers Andreessen Horowitz, Ribbit Capital, mortgage real estate investment trust Redwood Trust and Atalaya Capital Management participating, Point said Tuesday. Point’s plans to use the funding include expanding its Home Equity Investment division. The program lets homeowners get cash in exchange for a certain percentage of future appreciation of their home.
When homeowners apply for the HEI program, Point evaluates the finances of the applicants and makes a provisional offer. It then values the homes with an in-home appraisal, and updates the final offer. Once closing costs are met, Point funds up to 20% of the home’s property value.
“What’s compelling for homeowners, especially during Covid and inflation costs going up, is they don’t have to pay back the funds for 30 years,” Eddie Lim, cofounder of Point said in an interview. “Like other fintech companies, we don’t own the assets. We connect homeowners to investors. We take fees from both the homeowner and the investor upon transaction and also operate as the asset manager for the investor.”
Homeowners can unlock up to $500,000 by using the HEI product, Lim said, with no monthly payments and no income requirements. Point is one of a number of companies that offer homeowners access to their home equity by connecting them with investors.
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“The tight housing market is the best thing that can happen in our business. While it’s not good for mortgage refinancing companies, we’re counter-cyclical to rising rates,” Lim added, referring to the $25 trillion home-equity market.
Point has invested in more than 5,000 homes since launching in 2015, the company claimed.
With the new round of funding, Point plans to launch products, hire more employees and expand its footprint to 11 additional states bringing its presence to 28 markets by the end of this year. Point said that it currently operates in Washington, D.C. and 16 states including New York and Pennsylvania.
The company was founded by Alex Rampell, a general partner at Andreessen Horowitz, Eddie Kim, and Eoin Matthews. Bloomberg Beta, Deer Park Road Management, the Palisades Group, and Prudential are among the top investors backing Point.