Real estate financing startup, Homeward has completed a $371 Million Series B round that values the business at more than $800 million.
The three-year-old startup provides cash to buyers so they can submit the most competitive possible offers, or buy a new property prior to selling their existing home. The round, which included $136 million of equity funding and $235 million in debt financing, comes as continued demand for housing has led to a boom in all-cash offers.
Homeward’s founder and CEO, Tim Heyl explained that the company will use the financing to expand outside of Texas, Georgia, and Colorado and to grow its support desk, train new agents and automate some of its processes.
According to Forbes, the 33-year old CEO declined to disclose the company’s revenue or profits, he said transaction volume has increased more than 500% and has put the business on course to do more than $1 billion dollars in annual home sales. The company’s fees vary by state, but its standard charge is a 1.9% convenience fee, which it lowers if customers buy other services, like its mortgage product. Opendoor, the industry leader in i-buying, will in some cases buy a new home on behalf of customers, charging a 0.02% daily fee after the first 120 days it holds the property. Homeward’s pitch is that, unlike some competitors, its customers can work with any third party rather than being constrained into paying fees with a designated agent.
Homeward’s funding round was led by Norwest Venture Partners and included Blackstone Alternative Asset Management, Breyer Capital, as well as existing investors Adams Street, Javelin, and LiveOak Venture Partners.
Starting out as a real estate agent in Texas in 2009, Tim Heyl rose to become one of the city’s top brokers. While working in the city, he noticed that some customers couldn’t afford to buy a new home until their existing property was sold. So, he says, he bought a house on behalf of a client, who then purchased it from him when their old house eventually sold. He collected a fee from the seller’s agent in the process.
With a slightly different model, he launched Homeward in 2018; one that didn’t collect fees from the selling agent. He based the business in Austin but built it with a remote workforce, which will enable him to scale more easily as he expands outside of the three states where the company now operates.