Homeward Secures $105M, Will Empower Agents to Let Their Clients Buy Before They Sell
- $20 million in equity funding led by Adams Street Partners and $85 million in debt secured from multiple lenders
- The funding will allow Homeward to expand its agent partnerships and purchase more homes for its customers
- Homeward gives customers the cash they need to secure their new home, while guaranteeing the sale of their existing home
14 May, 2020, 06:03 ET
AUSTIN, Texas, May 14, 2020 /PRNewswire/ -- Homeward today announced it has secured growth capital of $105M, including $20M in equity and $85M in debt. The $20M of equity financing was led by Adams Street Partners, with additional participation by Javelin Venture Partners and LiveOak Venture Partners. The $85M in debt was secured from multiple institutional lenders.
The new funding will allow Homeward to purchase more homes for its customers, and expand its agent partnerships.
"Despite COVID-related volatility, we've continued to see strong customer and agent demand for our offering. Housing inventory is low right now, but demand remains high and customers are using our non-contingent cash offers to beat out other bidders," said Tim Heyl, founder and CEO at Homeward.
Jeffrey Diehl, Adam Street's Managing Partner and Head of Investments, will join the board. Jeff led an early investment in BoomTown, one of the leading CRM solutions for real estate agents, and the investment in Homeward is consistent with Adam Street's focus to target resilient companies that need capital to fuel growth.
"We are a selective investor, particularly in the current environment, but Homeward stood out," said Jeffrey Diehl. "The company is growing rapidly, has strong leaders with deep industry experience, and has impressive traction with agent partners."
Also participating in the round is Jed Katz, Managing Director of Javelin Venture Partners and formerly a Founder of Move.com and Rent.Net.
"Homeward solves a long-term pain point for Realtors and their clients by making offers more competitive and home sales more certain," said Jed Katz. "We think they have an A+ team and a solid model that's well positioned to scale in a way the industry and the capital markets will embrace."
Putting agents back in the center of real estate transaction innovation
Tim Heyl founded Homeward to empower modern real estate agents. Tim is one of the country's top agents, has sold over 3,500 homes, and founded the Heyl Group in 2009, which has grown to become one of the top 25 agent teams in the country.
"Most technology companies have come from outside the real estate space and have tried to cut the agent out," said Heyl. "We're taking a much different approach. We empower agents with institutional capital so they can enable their clients to buy before they sell."
43% of home buyers have an existing home they need to sell before they buy their next one. This hurdle can cause homeowners to delay their move indefinitely, which hurts both customers and their agents.
To solve this problem, Homeward works with agents to get their clients approved to make a Homeward all-cash offer. Agents go directly to Homeward's site and can register their client in less than a minute. Homeward then works to approve their client to make an all-cash offer.
The company will be expanding its relationships with top agents in the three states it operates in: Texas, Colorado, and Georgia. In coming years, the company plans to open its offering to agents nationwide.
"Homeward is built by a top agent who's trying to empower us and not cut us out," said Lane Hornung, Founder & CEO of 8z Real Estate. "Homeward understands the role agents should play in the transaction and that's why we partnered with them. We use Homeward as a secret weapon to help win new clients and close contingent buyers a lot faster than we could before."
"Working with Homeward, my clients got approved and made a winning offer within days," said Grant Rothberg, a top real estate agent in Houston. "They were able to move into their new home first, then take their time to sell their old home, ultimately earning them $40,000 more than low-ball iBuyer offers."
Redesigning the home buying experience
The Homeward Way is the company's core offering. It gives homebuyers credit for their home equity up front, and lets them make an all-cash offer to secure their next home using the company's funds. Homeward customers also receive a floor price guarantee on their existing home in case they're unable to sell it for its full market value.
Buyers that use Homeward's all-cash offer get an average discount of 2 - 5% on their next home and are twice as likely to beat buyers who make mortgage-backed offers. Homeward customers can also stay in their current home while they make improvements to their new property. They only move once and can control the timing of their move.
Homeward customers don't have to sell their existing homes at a discount to iBuyers, which typically offer below market pricing and charge fees greater than those of traditional real estate agents. The service charge for Homeward is transparent, between 2 - 3% of the purchase price depending on the home's size and location, compared to iBuyers who charge up to 9% of the home sale price. iBuyers also take a portion of the real estate agent's commission, and in some cases force the home buyer to work exclusively with their agent.
The Homeward Way:
- Get approved: Submit an online application and Homeward will calculate your home equity and provide you with an approval in minutes.
- Make an all-cash offer with Homeward's funds: Secure your next home by making an all-cash offer with Homeward's funds.
- Rent your new home from Homeward: Move into your new home and rent it from Homeward for up to six months while you finish selling your existing home.
- Sell your existing home: List your home for sale when you're ready. If it doesn't sell, Homeward will buy it from you at a pre-agreed, fair market price.
- Get a mortgage and close on your new home: As soon as your old home sells, buy your new one back from Homeward at the original price, plus a 2 - 3% convenience fee.
Homeward lets customers relax, and buy before they sell. Customers buy the home they want using an all-cash offer, and then sell their current property at full market value. Founded in 2018 and backed by Adams Street Partners and others, Homeward is expanding rapidly in Texas, Georgia and Colorado, with plans to offer it's solution to agents and home buyers nationwide. For more information, please visit Homeward.com.
About Adams Street Partners
Adams Street Partners is one of the largest and most established private markets investment management firms in the world. Adams Street commenced its investment program in 1972, and today manages $41 billion of assets across five strategies – primary and secondary private fund investments, co-investments, private credit investments, and direct growth equity investments. Adams Street employs more than 200 people in Chicago, Beijing, Boston, London, Menlo Park, Munich, New York, Seoul, Singapore, and Tokyo.
About Javelin Venture Partners
Javelin Venture Partners is a venture capital firm based in San Francisco, founded by former entrepreneurs who have first-hand experience developing companies from concept to thriving enterprise. Javelin invests in early-stage technology companies with large addressable markets and strong competitive advantages. The firm is an active investor with a long-term outlook, and is helping the next generation of founders build world-changing companies.
About LiveOak Venture Partners
LiveOak Venture Partners is a venture capital fund based in Austin, Texas. With 20 years of successful venture investing in Texas, the founders of LiveOak have helped create nearly $2 billion of enterprise value. While almost all of LiveOak's investments begin at the Seed and Series A stages, LiveOak is a full life cycle investor focused on helping create category leading technology and technology-enabled service companies headquartered in Texas. LiveOak Venture Partners has been the lead investor in about 30 exciting high-growth Texas-based companies in the last seven years including ones such as CS Disco, Digital Pharmacist, OJO Labs, Opcity and TrustRadius.
Share this article