SoftBank’s latest proptech bet is leading Pacaso’s $125M Series C

Less than six months after raising $75 million, Pacaso — a real estate platform which aims to help people buy and co-own a second home — announced today that it has raised $125 million at a $1.5 billion valuation.

SoftBank Vision Fund 2 led the Series C funding round for Pacaso, which essentially went from “launch to unicorn” in five months earlier this year and is pronounced like Picasso. New backers Fifth Wall and Gaingels also participated in the financing, along with existing backers Greycroft, Global Founders Capital, Crosscut and 75 & Sunny Ventures. (Sunny Ventures is Pacaso co-founder Spencer Rascoff’s venture firm). With the latest round, Picasso has now raised a total of $215 million in equity funding since its 2020 inception. It also secured $1 billion in debt financing earlier this year.

The fully distributed startup launched its platform in October of last year and already has an annualized revenue run rate of $330 million, according to CEO and co-founder Austin Allison — a feat which quite frankly seems remarkable. The company currently manages nearly $200 million in real estate on its platform, and in the second quarter, its website and mobile app saw a combined 1.8 million visits, up 196% from the first quarter. It’s currently serving owners “in the hundreds.”

Former Zillow executives Allison and Rascoff came up with the concept of Pacaso after leaving Zillow together about two years ago. (Publicly traded Zillow today has a market cap of $24 billion.) 

With a unique co-ownership model made possible via the creation of a property-specific LLC, the company aims to reduce the cost and hassle of second home ownership. It also gives vacation homeowners an alternative option to renting out their property.

Pacaso distinguishes its model from the age-old concept of timeshares, which sell the right to use a fixed amount of time in a condo or hotel. Pacaso aims to bring together a small group of co-owners to purchase a share of a single-family home and “enjoy ongoing access throughout the year.”

The way it works is that Pacaso purchases a home either outright or shares in a home. The company then partners with local real estate agents to market the properties. It then sells shares in the home — from one-eighth of the home to a greater percentage.

Pacaso holds a brokerage license in about 25 top second home markets such as Napa, Lake Tahoe, Palm Springs, Malibu and Park City. It recently expanded to its first market outside of the U.S. — Spain. Buyers can view curated listings on the startup’s website, which includes active listings, as well as previews of homes under consideration for purchase based on buyer demand.

In addition to curating the listings, Pacaso also offers integrated financing, “upscale” interior design, professional property management and proprietary scheduling technology.

In January of this year, Pacaso had 30 employees. Today, it has over 120, according to Allison.

It’s important to note that while Pacaso one day aspires to offer homes that are affordable to a broader segment of the population, Allison acknowledges that currently, the homes available on its platform are “very much” luxury, or higher price, homes.

As for what markets it plans to enter next, he said that will be based on customer feedback. For now, Allison said, 65% of Pacaso’s customers are first-time second homeowners and 25% of are non-white or identify as LGBTQ.

SoftBank Investing Partner Lydia Jett says she was drawn to Pacaso for both professional and personal reasons.

For one thing, she says that when she was growing up, her family owned one-tenth of a “modest” beach house on the coast of Oregon.

“This asset that should be an investment, and source of joy actually had an incredible amount of friction, pain and unexpected cost,” Jett told TechCrunch. “It was a difficult asset to make liquid.”

The friction and pain she referred to included debates around scheduling, capital investments and tension when one of the co-owners needed liquidity but none of the others wanted to buy them out.

Part of the pain involved many of the the things that Pacaso is trying to solve for, Jett believes. By managing the whole co-ownership process, owners don’t have to deal with the “headaches” of maintenance, furnishings and scheduling respective vacations, among other things.

“We’ve designed  a very innovative scheduling solution we call SmartStay, which empowers a calendar to be shared equitably among the ownership group so that each co-owner has fair and equitable access to the property all times of the year,” Allison told TechCrunch

In other words, Picasso is effectively an intermediary between the co-owners, something Jett makes it a very attractive model.

Also, she said, SoftBank was drawn to the opportunity to “create a whole new category of home ownership.”

“This is something that fundamentally can enrich millions of people’s lives,” she told TechCrunch, “and help them realize that dream of co-ownership.”

#apps, #austin-allison, #funding, #fundings-exits, #pacaso, #proptech, #real-estate, #recent-funding, #softbank-vision-fund-2, #spencer-rascoff, #startup, #startups, #venture-capital

Homebuying startup Flyhomes closes $150 million Series C

Amid a recent tear in residential real estate investment, venture capitalists are looking to get a piece of homebuying startup Flyhomes.

The five-year-old startup announced today that they’ve closed a $150 million Series C co-led by Norwest Venture Partners and Battery Ventures. Fifth Wall, Camber Creek, Balyasny Asset Management, Zillow’s Spencer Rascoff, and existing investors Andreessen Horowitz and Canvas Partners also participated in the round. Norwest’s Lisa Wu and Battery’s Roger Lee are joining Flyhomes’ board as part of the deal.

The end-to-end residential real estate startup says they handle “every step of the homebuying process, from brokerage to mortgage,” building financial tools that customers need throughout the process. The company has now raised some $310 million in total.

The startup is well-positioned during a historic run-up of home prices in the US that has made deals more competitive than ever for prospective buyers. A recent report by Redfin notes that more than half of US homes are selling above their asking price right now, up from 1 in 4 a year ago. A Zillow report notes that nearly half of US homes are selling within one week of going on the market.

Flyhomes’s Cash Offer lending product allows consumers purchasing homes to make more attractive all-cash offers to sellers, with the company noting that even if a buyer ends up backing out of the deal, Flyhomes will still buy the home themselves. Central to the startup’s business is sellers being more amenable to all-cash offers, allowing consumers making them to win deals even when they aren’t the highest bidders.

The company says it has bought and sold more than $2.5 billion worth of homes since launching in 2016.

#andreessen-horowitz, #battery-ventures, #camber-creek, #companies, #economy, #entrepreneurship, #fifth-wall, #financial-tools, #norwest-venture-partners, #real-estate, #real-estate-investment, #redfin, #spencer-rascoff, #startup-company, #tc, #united-states, #zillow

Real estate tech startup Offerpad to go public via SPAC merger in $3B deal

Offerpad is the latest proptech company to go public via a SPAC merger.

The Phoenix, Ariz.-based company announced Thursday its plans to go public by merging with Supernova Partners Acquisition Company in a deal valued at $3 billion.

The transaction is expected to close in the second, or early third, quarter of 2021. The combined company will be named Offerpad Solutions and trade on the New York Stock Exchange under the ticker “OPAD.”

Founded in 2015, Offerpad started out as primarily an iBuyer (meaning it bought homes from sellers who signed up online) and has since evolved its platform in an effort to be a one-stop shop for people looking to buy or sell a home. For example, it now also offers home improvement advances, as well as title and mortgage services. The company has raised $155 million in equity funding from investors such as LL Funds, in addition to hundreds of millions more in debt over the years.

Since its inception, Offerpad says it has completed 30,000 transactions and achieved nearly $7 billion in gross transaction volume. The company projects it will generate revenue of $1.4 billion this year, up from an estimated $1.1 billion in 2020. That compares to revenue of  $100 million in 2016. Offerpad also says it has had “positive per-home contribution margins” since 2016. 

The company has ambitious goals, projecting revenue of $2.4 billion in 2022 and $3.9 billion in 2023.

Supernova Partners, which spun up the SPAC for this deal, is led by Spencer Rascoff — a serial entrepreneur with plenty of prop tech experience who co-founded Hotwire, Zillow, dot.LA and Pacaso, and who led Zillow as CEO for nearly a decade.

PIPE investors include funds and accounts managed by BlackRock and Zimmer Partners, as well as national homebuilder Taylor Morrison Home Corp.

Offerpad says that by partnering with Supernova to become a public company, it expects it will be able “to accelerate its growth to capture more” of the market. The company currently operates in over 900 cities and towns across the country and plans to expand nationwide. 

Rascoff believes Offerpad “is incredibly well-positioned to grab a huge piece” of the online real estate market.

“iBuying has barely scratched the surface of real estate, one of the biggest addressable markets in the world,” he said in a written statement. “In general, real estate continues to be mostly analog, in contrast to other industries like grocery, autos and pharmaceuticals, but consumers demand online solutions. As they bring more transactions online, we believe online real estate as a whole is poised to grow rapidly in the coming years.”

Offerpad competes with companies such as Opendoor, Redfin and Zillow, among others.

As part of the transaction, existing Offerpad shareholders will roll 100% of their equity into the combined company and are expected to own approximately 75% of the combined entity at closing. Offerpad’s founder and CEO Brian Bair will receive high-vote stock that is expected to represent approximately 35% of the voting power of the combined company.

Earlier this month, real estate tech startup Doma, formerly known as States Title, announced it would go public through a merger with SPAC Capitol Investment Corp. V in a deal valued at $3 billion, including debt.

#arizona, #blackrock, #exit, #fundings-exits, #online-real-estate, #phoenix, #real-estate, #redfin, #spencer-rascoff, #startups, #tc

Cheese raises $3.6M for its digital bank aimed at the Asian-American community

Many things have accelerated in the world of fintech over the past year, not the least of which is the trend of digital banks aimed at specific communities in the U.S.

In the past few months alone, a number of neobanks targeting the Black and Latinx communities have emerged. Most recently, we covered the $5 million raise of one such bank — First Boulevard.

Today, Cheese announced the launch of its digital banking platform that is aimed at primarily serving the Asian-American community. Co-founder and CEO Ken Lian came to the United States from China in 2008 to attend college. In the years after his move, Lian said he paid thousands of dollars in bank fees and got rejected “multiple times” for basic bank accounts, despite having a FICO score over 800.

Those experiences led him to come up with the concept behind Cheese, which he said will offer its banking services via a multi-language platform. The one-year-old startup also has a social component, giving customers a way to support Asian-American businesses and organizations. Lian is no stranger to the world of entrepreneurship, having also founded Moolah Science, a startup that helped consumers find out if online stores owed them a refund that got acquired by a Fortune 500 company in 2019.

Lian founded Cheese along with Zhen Wang and Qingyi Li under the premise that Asian-Americans are often subject to discrimination and “an unequal playing field” in America despite being among the most educated in the country.

“We understand Asian users much better than anybody else because we are the user,” Lian told TechCrunch. “[Traditional] banking didn’t understand me or my culture or my lifestyle or what matters to me. Our needs are different.”

“A lot of challenger banks also never focused on Asian communities and immigrants,” he added. “We want to provide a great product to welcome these people to the U.S. and make it easy for them to bank.”

Over the past year, Cheese has raised a total of $3.6 million in funding from investors such as iFly.vc; Amplify; Adam Nash, former CEO of Wealthfront; Zillow co-founder Spencer Rascoff and VC firms Wedbush Ventures, Idealab and Operate Venture Studio. The startup has also partnered with actor Jimmy Wong, an advocate for Asian rights. He will serve as Cheese’s chief community ambassador.

Cheese’s platform provides a debit Mastercard (issued by Coastal Community Bank), which is available to those with no credit history. (If this sounds familiar, it’s a similar offering as that of TomoCredit, a startup that recently raised $7 million to scale its debit card product for those with little or no credit history.)

Cheese cardholders can use the virtual cards instantly through their mobile wallets, the company said. Other features include offering advance pay up to two days early with direct deposit, a 3% deposit bonus for referring friends, 0.3% annual percentage yield (APY) and up to 10% cash back on purchases at more than10,000 merchants. 

Image Credits: Cheese

Han Shen, founding partner of iFly, believes Cheese can help the underbanked community in the United States.

They don’t necessarily get the same kind of service or product for their banking needs and they face all kinds of pain points,” he wrote. “Cheese has a list of products they want to develop for that type of customer…We know there is a product market fit based on our research and we know this is a strong team.”

The investment marks iFly’s first in the consumer fintech space in which it acted as a lead investor.

We were already determined to invest on the mission side. They wanted to make things easier and better for the underbanked, including immigrants,” Shen continued. “People deserve a better service. In Cheese’s case, the question is not whether or not to provide it, the question is about how to do it right to address their pain points.”

In conjunction with its launch, Cheese has pledged $100,000 to the Cheese Giveback Fund, 100% of which will be donated to nonprofits and community service programs in support of Asian neighborhoods and businesses impacted by violence and economic hardship during the COVID-19 pandemic.

#adam-nash, #america, #amplify, #bank, #banking, #cheese, #china, #digital-banks, #finance, #financial-services, #financial-technology, #funding, #fundings-exits, #idealab, #mastercard, #payments, #recent-funding, #spencer-rascoff, #startups, #tc, #united-states

Techstars Los Angeles names Matt Kozlov as its new managing director

Techstars Los Angeles, the local Los Angeles-focused branch of the global accelerator network, has named Matt Kozlov as its new managing director.

Kozlov, a longtime Techstars network fixture, has previously served as the head of the organization’s healthcare accelerator through a partnership with Cedars-Sinai and as the head of the Techstars Starburst Space Accelerator, which was focused on space and aerospace startups.

Now, Kozlov turns his attention to the Los Angeles ecosystem broadly.

“I’m humbled to have the opportunity each day to support incredible founders who are solving some of humanity’s greatest challenges,” said Kozlov, in a statement. “As I begin this new role, my goal is to continue to leverage my experience to help generate opportunities for future Techstars LA companies to make meaningful, long-term impact.”

Kozlov’s appointment comes as the Los Angeles tech ecosystem is having something of a moment. As the diaspora out of Silicon Valley continues, the Southern California tech world has proven to be a tempting landing pad during the COVID-19 pandemic. And remote work means that Los Angeles could be a fixture for more investors looking to escape the Bay.

Beyond Southern California’s coastal appeal is a vibrant technology ecosystem that encompasses enterprise software, financial services, healthcare, aerospace and defense, robotics, ecommerce and social media. It’s the home of social networking favorites Snap and TikTok’s U.S. base of operations and SpaceX’s significant presence has born a number of talented hardware and engineering startups.

LA is truly having a moment and Kozlov’s experience with some of the less-well-known corners of the city’s tech ecosystem could be a boon for the Techstars program.

“I’m thrilled by the selection of Matt as the new Managing Director for Techstars LA,” said Anna Barber, former Managing Director, Techstars LA, who stepped down from the role in November to join venture firm M13 as Partner, in a statement. “He is a talented investor and longstanding leader in LA’s Techstars community, and has been an essential and valued mentor for the program for the past four years. He embodies the Techstars values of #givefirst and I have every confidence that he is the right leader to continue building on what we’ve established in the LA community.”

Collectively, the 40 alumni companies who have participated in Techstars Los Angeles accelerator program have raised over $126 million and have a combined market cap of $328.6 million.

“Techstars LA plays a critical role in the Los Angeles tech ecosystem as the premier startup accelerator, providing valuable mentorship and funding for dozens of companies a year,” said Spencer Rascoff, Chair of dot.LA and Los Angeles angel investor. “I’m very excited that Matt will be the new Managing Director of Techstars LA. He brings extensive experience in healthcare and aerospace investing and has been an incredible mentor and leader to the companies of the Techstars Starburst Space Accelerator over the last several years.”

 

#aerospace, #anna-barber, #chair, #david-cohen, #e-commerce, #enterprise-software, #financial-services, #head, #healthcare, #los-angeles, #louisiana, #m13, #matt-kozlov, #mentorships, #premier, #sinai, #social-media, #spacex, #spencer-rascoff, #startup-accelerator, #tc, #techstars, #united-states

La Haus is bringing US tech services to Latin America’s real estate market

The alchemy for a successful startup can be hard to parse. Sometimes, it’s who you know. Sometimes it’s where you go to school. And sometimes it’s what you do. In the case of La Haus, a startup that wants to bring U.S. tech-enabled real estate services to the Latin American real estate market, it’s all three.

The company was founded by Jerónimo Uribe and Rodrigo Sánchez Ríos, both graduates of Stanford University who previously founded and ran Jaguar Capital, a Colombian real estate development firm that had built over $350 million worth of retail and residential projects in the country.

Uribe, the son of the controversial Colombian President Daniel Uribe (who has been accused of financing paramilitary forces during Colombia’s long-running civil war and wire-tapping journalists and negotiators during the peace talks to end the conflict) and Sánchez Ríos, a former private equity professional at the multi-billion-dollar firm Lindsay Goldberg, were exposed to the perils and promise of real estate development with their former firm.

Now the two entrepreneurs are using their know-how, connections and a new technology stack to streamline the home-buying process.

It’s that ambition that caught the attention of Pete Flint, the founder of Trulia and now an investor at the venture capital firm NFX. Flint, an early investor in La Haus, saw the potential in La Haus to help the Latin American real estate market leapfrog the services available in the U.S. Spencer Rascoff, the co-founder of Zillow, also invested in the company.

“Latin America is very early on in its infancy of having really professional agents and really professional brokerages,” said Flint.

La Haus guides home buyers through every stage of the process, with its own agents and salespeople selling properties sourced from the company’s developer connections.

“The average home in the U.S. sells in six weeks or less,” said La Haus chief financial officer Sánchez Ríos in an interview. “That timing in Latin America is 14 months. That’s the dramatic difference. There is no infrastructure in Latin America as a whole.”

La Haus began by reaching out to the founders’ old colleagues in the real estate development industry and started listing new developments on its service. Now the company has a mix of existing and new properties for sale on its site and an expanded geographic footprint in both Colombia and Mexico.

“We have a portal… that acts as a lead-generating machine,” said Sánchez Ríos. “We aggregate listings, we vet them. We focus on new developers.”

The company has about 500 developers using the service to list properties in Colombia and another 200 in Mexico. So far, the company has facilitated more than 2,000 transactions through its platform in three years.

“Real estate now is turning fully digital and also in this market professionalizing,” said Flint. “The publicly traded online real estate companies are approaching all-time highs. People are just prizing the space that they spend their time in… the technologies from VR and digital walkthroughs to digital closes become not just a nice to have but a necessity. “

Capitalizing on the open field in the market, La Haus recently closed on $10 million in financing led by Kaszek Ventures, one of the leading funds in Latin America. That funding will be used to accelerate the company’s geographic expansion in response to increasing demand for digital solutions in response to the COVID-19 epidemic.

“Because of Covid-19, consumers’ willingness to conduct real estate transactions online has gone through the roof,” said Sánchez Ríos, in a statement. “Fortunately we were in the position to enable that, and we expect to see a permanent shift online in how people conduct all, or at least most, of the home-buying process. This funding gives us ample runway to build the end-to-end real estate experience for the post-Covid Latin America.”

Joining NFX, Rascoff, and Kaszek Ventures are a slew of investors, including Acrew Capital, IMO Ventures and Beresford Ventures. Entrepreneurs like Nubank founder David Velez; Brian Requarth, the founder of Vivareal (now GrupoZap); and Hadi Partovi, CEO and founder of Code.org, also participated in the financing.

“We backed La Haus because we saw many of the same ingredients that resulted in a fantastic outcome for many of our successful companies: A world-class team with complementary skills; a huge addressable market; and an almost religious zeal by the founders to solve a big problem with technology,” said Hernan Kazah, co-founder and managing partner of Kaszek Ventures. 

#acrew-capital, #colombia, #david-velez, #hadi-partovi, #kaszek-ventures, #la-haus, #latin-america, #mexico, #nfx, #nubank, #online-real-estate, #pete-flint, #real-estate, #recent-funding, #spencer-rascoff, #stanford-university, #startups, #tc, #trulia, #united-states, #vivareal, #zillow