Real EstateTechnology

Real estate unicorn Roofstock cuts its workforce by 20%

It's unclear how many employees were affected by the layoffs, which occurred shortly after the company's first NFT-enabled property sale was announced

Within the span of a week, San Francisco-based digital real estate unicorn Roofstock completed its first property sale through non-fungible token (NFT) and laid off about 20% of its workforce.

A Roofstock spokesperson told SFGATE that owing to the “economic environment,” the company believes the decision to be an “appropriate adjustment” — but did not specify how many people were laid off. The spokesperson also did not clarify as to whether the employees will receive severance pay or healthcare benefits.

Roofstock lists a total of between 500 to 1,000 employees on LinkedIn, with 517 employee-generated profiles tied to the company.

Following the layoffs, a handful employees reached out to the LinkedIn community in search of work opportunities, including a former regional field manager at Roofstock, Matt Fowler, who posted: “As much as it pains me to say, I was part of the large, unexpected layoffs at Roofstock. If anyone knows of anywhere that could be a good fit with my 20+years in maintenance/renovation leadership in multi-family, single family, or senior living, please pass my name along. Thanks in advance.”

Taylor Wagstaff, who worked as an agent relationship coordinator at the company, also posted about the layoffs, stating: “Last week myself, and many of my talented colleagues at Roofstock, learned that our positions were eliminated due to a business restructuring. While my time there was cut short, I grew a lot professionally, met so many amazing people and was pushed out of my comfort zone. 

“With that being said, I am #opentowork and searching for my next opportunity! Looking for remote positions where I can leverage my relationship management, customer support, and business development skills. If you have any openings or connections that you think might be a good fit, I appreciate you sending it my way!”

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Roofstock raised in March 2022 about $240 million in Series E funding, led by SoftBank Vision Fund 2, which brought its total valuation to $1.94 billion and gave the company its unicorn status. Other participants in the funding round included Khosla Ventures, Lightspeed Venture Partners, Bain Capital Ventures, Canvas Ventures, Citi Ventures, First American Financial, Expanding Capital, 7GC & Co., JLL Spark and SVB Capital, and several others. 

Rooftsock CEO and co-founder Gary Beasley said at that point that the company was destined for massive growth in the future.

“There has never been a time quite like this for single-family real estate, and Roofstock is truly at the vanguard of making the market work for everyone,” Beasley said in a statement. 

Shortly after Beasley made that statement, the nation was plagued with a number of issues, including rising mortgage rates, high inflation and a questionable economy, which affected the way buyers, sellers, investors and real estate professionals viewed the industry.

And in May, SoftBank, Roofstock’s Series E funding round leader, announced that it would be cutting its investment activity in half, citing marketing volatility as the driver of the decision.

“They’re big supporters of the business. They’ve been terrific through the process and there’s no pressure to put that money to work quickly or do anything like that. We will use it to continue to build out our business and continue to invest a bit more in marketing,” Beasley said about SoftBank prior to the funding decision.

SoftBank CEO Masayoshi Son told TechCrunch that the company’s investments depend on the company’s LTV levels and investment opportunities, but when it comes to new investments, it will be half or even a quarter compared to 2021.

Roofstock, founded in 2016, provides a fintech platform for investors to manage, sell and partially invest in single-family rental properties in 27 markets across the U.S. Operating on a remote real estate investment model, Roofstock enables customers to buy properties in other areas and rent them out.

SFGATE, which broke the Roofstock layoff story, says the company model is “contentious” because it limits home ownership access as investors buy homes to rent out.

Beasley disagrees.

Beasley told Real Deal in April that the business model creates more liquidity and transparency, reducing costs and benefiting investors.

Roofstock was valued at $600 million in January 2020, prior to the Series E funding round. The company has facilitated over $5 billion in transaction volume since 2016.

Prior to the layoffs, Roofstock made headlines last week when it sold an NFT-enabled South Carolina single-family home worth $175,000 via Roofstock onChain (ROC), its web3 subsidiary. It was purchased with USDC, a digital stablecoin pegged to the U.S. dollar. Owning the NFT means owning the home in Columbia, S.C.

“Each home is titled in a limited liability company whose ownership is associated with a unique Home onChain, which is an NFT on the Ethereum blockchain,” the company said in a statement. “Each Home onChain is transferred using smart contracts, which are deployed on the Ethereum network, and the entire transaction takes place transparently on the blockchain.”

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