Proptech HomeLight raised $115 million in capital and acquired Accept.inc., despite a challenging mortgage market in which real estate brokerages are laying off staff.
The Scottsdale, Arizona-based company secured $60 million in equity and $55 million in debt financing, according to a Thursday news release from the firm.
“We’ll use the $115M in equity and debt capital to continue to fuel operations and meet the high demand from top agents for our flagship financial products, HomeLight Cash Offer and HomeLight Trade-In, in the coming months,” Drew Uher, HomeLight’s founder and CEO, said in an email.
The company pays as much as 90% of a home’s expected value for the HomeLight Trade-In product, launched in 2020. For the HomeLight Cash Offer program, also introduced two years ago, the firm makes an all-cash offer on the client’s behalf and holds the home until the client secures financing. HomeLight Cash Offer, in particular, saw a 500% year-over-year growth in transaction volume as of April, Uher said.
Backers included Zeev Ventures, Menlo Ventures, Group 11, Crosslink Capital, Bullpen Capital and Google Ventures. The total funding, since the startup’s launch in 2012, is about $645 million and its valuation is at roughly $1.7 billion.
The company also announced Thursday it will acquire Accept.inc, a Denver, Colorado-based lending startup, in an all-stock transaction for an undisclosed amount. The deal is expected to close in coming weeks.
HousingWire recently spoke with Jon Irvine, Chief Production Officer at Change Lending, about how brokers can gain a new competitive advantage in the current tight market.
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The majority of the Accept.inc team will take on new roles within HomeLight, Uher said, adding: “Bringing Accept.inc into the HomeLight family is a strategic move that will allow even more of HomeLight’s top agents and their clients to benefit from the power, speed and certainty of contingency-free transactions.”
In the first quarter of 2022, HomeLight and Accept.inc represented more than $3 billion in combined referred transaction volume, according to Uher.
The acquisition and funding comes as numerous real estate brokerages are issuing pink slips and halting expansion plans.
This week, brokerage and listings platform Redfin laid off 470 employees, or about 8% of its workforce, citing housing demand falling short of the firm’s expectation in May. The same day, however, it approved executive compensation packages totaling millions.
Compass also eliminated about 450 positions, roughly 10% of the brokerage’s current employees. The company also plans to pause merger and acquisition activity and market expansion for the rest of the year.
This challenging environment also is affecting talent acquisition at HomeLight, which is slowing hires through the end of the year.
“Like many others, we’re watching burn closely,” said Uher. “Our main goal is to not only continue to strengthen our flagship financial products but to also position HomeLight to weather uncertainty this year and into next year.”
HomeLight primarily focused on using artificial intelligence to connect consumers and real estate investors to agents when it first launched 10 years ago. In 2019, the company expanded to providing title and escrow services to agents and home sellers and matching sellers with iBuyers. Later that year, the firm acquired digital mortgage lending startup Eave to get into mortgage lending.