Homelight Raises $100M Series D at $1.6B Valuation
HomeLight Secures $100 Million in Series D Funding and $263 Million in Debt
HomeLight, a company operating a real estate technology platform, has announced the successful acquisition of $100 million in a Series D funding round. Additionally, the company secured $263 million in debt financing.
Investment Details
Zeev Ventures, a returning investor, spearheaded the equity round. Participation also came from Group 11, Stereo Capital, Menlo Ventures, and Lydia Jett of SoftBank Vision Fund.
These financings collectively bring the total funding raised by the San Francisco-based company, since its establishment in 2012, to $530 million. The equity investment has resulted in a valuation of $1.6 billion for HomeLight, representing a tripling of its valuation from its November 2019 Series C round.
Zeev Ventures also led the Series A funding in 2015, demonstrating continued confidence in HomeLight’s trajectory.
Projected Growth and Revenue
This latest influx of capital arrives as HomeLight anticipates a substantial “3x” year-over-year growth rate. Founder and CEO Drew Uher forecasts the company’s annual revenue will triple, exceeding $300 million in 2021.
Based on these projections, it is estimated that HomeLight generated approximately $100 million in revenue during 2020.
Evolution of HomeLight’s Business Model
Over time, HomeLight, like many in the real estate tech sector, has refined its core business model.
Initially, HomeLight’s primary offering centered on leveraging artificial intelligence to connect consumers and real estate investors with suitable agents. The company has since broadened its services to include providing title and escrow services to agents and home sellers, as well as facilitating connections between sellers and iBuyers.
In July 2019, HomeLight expanded its capabilities through the acquisition of Eave, marking its entry into the competitive mortgage lending landscape.
Streamlining the Home Buying and Selling Process
“Our goal is to remove as much friction as possible from the process of buying or selling a home,” stated Uher.
HomeLight launched its key financial products, HomeLight Trade-In and HomeLight Cash Offer, in January 2020. These products experienced over 700% growth since their introduction, a surge partially attributed to the impacts of the pandemic.
The Trade-In product empowers clients with greater control over their moving timeline and transaction capabilities. The Cash Offer product enables individuals to make all-cash offers on properties, even when requiring a mortgage.
Addressing Pain Points in Real Estate Transactions
“The pandemic only highlighted many of the pain points in the real estate transaction process that we’ve been focused on solving since our founding,” Uher explained to TechCrunch.
He further elaborated on the challenges within the industry, citing information asymmetry, outdated procedures, excessive costs, limited inventory, and intense bidding wars as obstacles for both buyers and sellers, even without the added complexities of a global pandemic.
Strategic Acquisitions and Board Appointments
In August 2020, the company acquired Disclosures.io and subsequently launched HomeLight Listing Management. This initiative aimed to simplify property information sharing, buyer interest tracking, and offer management for agents.
In June 2021, Sean Aggarwal, chairman of Lyft and former CFO of Trulia, was appointed to HomeLight’s board of directors.
The Genesis of HomeLight
Uher founded HomeLight following a personally frustrating experience attempting to purchase a home in the highly competitive Bay Area market.
“The process of buying a home in San Francisco was so frustrating it made me want to bang my head against the wall,” Uher recalled during HomeLight’s Series C funding announcement. “I realized there were so many things wrong with the real estate industry.”
He experienced difficulty finding the right agent, but ultimately felt empowered to compete once he did. This experience spurred the creation of HomeLight.
Leveraging Machine Learning and Expanding Network
HomeLight initially launched with an agent matching platform, utilizing proprietary machine-learning algorithms to analyze millions of transactions and agent profiles. The company claims to connect clients with a real estate agent on average every 90 seconds.
Over the years, hundreds of thousands of agents have applied to join the HomeLight network, and the company has collaborated with over 1 million homebuyers and sellers across the United States. Currently, HomeLight focuses on working with the top 28,000 agents nationwide, emphasizing collaboration rather than replacement.
Future Expansion Plans
Uher stated that the new capital will be used, in part, to expand the availability of its Trade-In and Cash Offer operations to new markets. These services are currently available in California, Texas, and Colorado.
“We plan to expand as quickly as we can across the entire country,” Uher said. “We also plan to hire aggressively in 2021 and beyond.”
Company Growth and Locations
HomeLight currently employs over 500 individuals, an increase from approximately 350 at the end of the previous year. The company maintains offices in Scottsdale, Arizona; San Francisco; New York; Seattle; and Tampa, with plans to establish additional locations throughout the U.S. in the coming months.
Industry Perspective
Oren Zeev, founding partner at Zeev Ventures, expressed his belief that HomeLight is uniquely positioned to revolutionize the real estate transaction experience for agents and their clients.
“With the onset of iBuyers and other technology introduced in the past decade, many proptech companies are building products to cut agents out of the transaction process entirely,” Zeev wrote. “This is where HomeLight uniquely differs — and excels — from its competitors…They’re in the perfect position to revolutionize the industry.”