Just weeks following its public debut via a SPAC merger, Porch has announced the completion of four acquisitions totaling $122 million. The most significant of these is the purchase of Homeowners of America for $100 million, substantially strengthening Porch’s position within the home insurance market. Additionally, Porch is incorporating V12, a mover marketing and data platform, for $22 million, alongside home inspection service Palm-Tech and iRoofing, a software-as-a-service (SaaS) solution designed for roofing professionals. The financial terms for the acquisitions of Palm-Tech and iRoofing were not publicly disclosed.

While initially recognized as a marketplace connecting homeowners with home improvement and repair services – its original focus upon launching approximately seven years ago – Porch has evolved. Around two years after its 2013 inception, the company shifted its strategy to developing what it now defines as a “vertical software platform for the home.” Through a series of strategic acquisitions, the Porch Group now encompasses Porch.com, alongside services such as HireAHelper, Inspection Support Network for home inspectors, Kandela for managing relocation services, and Elite Insurance Group, an insurance brokerage. Currently, Porch’s tools are utilized – either directly or indirectly – by approximately two-thirds of U.S. homebuyers each month.

According to Porch founder and CEO Matt Ehrlichman, the company initially intended to go public through a traditional initial public offering. However, he explained that utilizing the increasingly common SPAC route accelerated the timeline by a year, enabling the company to proceed with the acquisitions announced today.

“We successfully raised $323 million, providing us not only with public company status and access to public capital, but also with substantial financial resources,” Ehrlichman stated. “This accelerated timeline allowed us to pursue acquisitions that we believe are an excellent strategic fit for Porch.” Porch has revised its 2021 revenue guidance from a previous projection of $120 million to $170 million, factoring in the impact of these acquisitions. This represents an anticipated revenue growth of approximately 134% year-over-year between 2020 and 2021.

As previously communicated in its public filings, Porch’s 2021 strategy prioritized expansion within the insurance sector. Ehrlichman clarified that Porch now views itself as a vertical software company that integrates insurtech into its existing services to generate a consistent revenue stream. The company’s broad service offerings result in effectively zero customer acquisition costs for these additional services.

Porch already operated as a licensed insurance brokerage. The acquisition of Homeowners of America adds a company that functions both as an insurance carrier and a managing general agent to its portfolio.

“We are positioned to capture the full economic benefit as we assist consumers in securing insurance for their new homes, and we can meticulously manage the process to ensure a positive experience,” explained Ehrlichman. “By integrating the technology we’ve invested in, we can simplify and expedite the process of obtaining the appropriate insurance coverage at a competitive price. Furthermore, our extensive data regarding the home – including roof age and potential appliance failures identified during inspections – provides a significant advantage in the insurance market.”

Data acquisition is a central theme underlying many of these acquisitions. Porch’s comprehensive customer data enables it to provide acquired companies with access to valuable insights, enhancing their service offerings and decision-making capabilities.

Homeowners of America currently operates in six states (Texas, Arizona, North Carolina, South Carolina, Virginia and Georgia) and holds licenses in 31 states. With a network of over 800 agencies, Porch intends to broaden the company’s network and geographic presence in the coming months. “Our ability to generate demand without incurring customer acquisition costs nationwide presents a significant opportunity for expansion,” Ehrlichman noted.

Regarding V12, Porch’s primary interest lies in the company’s mover marketing and data platform. This acquisition is expected to contribute to the company’s medium-term objective of establishing a $200 million revenue stream in this area. V12 serves multiple industries, including the automotive sector, and will continue to do so. The platform’s core function is to identify optimal times to engage with consumers, such as before a vehicle purchase or relocation. Combining Porch’s existing data with V12’s capabilities is anticipated to enhance these features and enable Porch to offer not only mover marketing but also what Ehrlichman termed “pro-mover” services.

“V12 serves as the foundation for our marketing software division, with a key focus on mover marketing, which will provide substantial long-term differentiation. However, they are also developing other initiatives with promising growth potential, and those will continue to be pursued,” said Ehrlichman.

The acquisitions of iRoofing and Palm-Tech align with Porch’s previous investments in the contractor and inspection sectors. The plan is to accelerate their growth by integrating them into the broader Porch Group’s suite of products.

“Our business model is characterized by a high degree of recurring revenue,” stated Porch CFO Marty Heimbigner. “The vast majority of our revenues, including those from these recent acquisitions, are consistent and predictable. This repeat revenue also boasts high margins, with a cost of revenue below 20%, and is projected to grow by more than 30% annually on our platform. Therefore, we believe these acquisitions will significantly benefit our shareholders.”