Just days after publicly traded real estate tech companies Redfin and Compass laid off a combined 900-plus employees, another proptech — HomeLight — is announcing that it has secured $60 million in capital and $55 million in debt financing.
HomeLight’s latest $60 million equity raise is an extension of the company’s $100 million Series D that 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 2012 inception and is valued at $1.7 billion. Notably, existing investor Oren Zeev contributed the whole $60 million.
“This fundraise and acquisition allow us to play both offense and defense — expanding our business while also positioning the company to weather uncertainty this year and into next year,” Drew Uher, HomeLight’s founder and CEO, told TechCrunch.
The company also announced today that it is acquiring Accept.inc, a Denver-based lending startup, in an all-stock transaction for an undisclosed amount. The deal is expected to close in coming weeks. Accept describes itself as an iLender, or a “technology-enabled lender” that gives people a way to submit all-cash offers on a home upon qualifying for a mortgage. In June of 2021, TechCrunch covered the news that Accept had secured $78 million in debt and $12 million in equity. SignalFire led the equity portion of its financing, 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 top agents and their clients to benefit from the power, speed, and certainty of contingency-free transactions.”
Over the years, like many other real estate tech platforms, HomeLight has evolved its model. HomeLight’s initial product focused on using artificial intelligence to match consumers and real estate investors to agents. Since then, the company has expanded to also providing title and escrow services to agents and home sellers and matching sellers with iBuyers. In July 2019, HomeLight acquired Eave as an entry into the (increasingly crowded) mortgage lending space.
In January 2020, HomeLight launched its flagship financial products, HomeLight Trade-In and HomeLight Cash Offer. As of 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 represented more than $3 billion in combined referred transaction volume.
“Our original goal was to simply remove as much friction as possible for both agents as well as their clients, but as the market became more volatile over the last two years,” Uher told TechCrunch, “it turned into one of the most crucial tools agents would utilize to compete and win in their local markets.”
Uher believes that HomeLight’s latest raise is an example of a new world “where flat valuations are the new up.”
“It’s a testament to the strength of our business,” he said.
Acknowledging the struggles that other players in the space are currently facing amidst rising mortgage interest rates and a general housing market slowdown, Uher added that HomeLight is “watching burn closely.”
“We’ve slowed hiring through the end of the year,” he told TechCrunch. “…We have continued to prioritize strengthening our operations, profitability, and runway to set HomeLight up 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 popped up in the proptech space with the goal to help homebuyers and sellers with various aspects of the buying and selling process and that HomeLight wanted to be even more competitive.
“Our goal over the last year has been to hyper-focus on strengthening our flagship financial products to allow our agents to continue to compete and win,” he told TechCrunch. “We recognize how cash has continued to be king for buyers and sellers in today’s market, and saw an opportunity to partner with one of the key players dominating the cash offer market.”