Sequoia, Jay-Z & Will Smith Invest in Landis for Affordable Homeownership

The Path to Homeownership: Landis' Innovative Approach

Achieving homeownership is a crucial factor in establishing lasting wealth across generations, and Landis is dedicated to transforming this aspiration into a reality for renters.

U.S. Homeownership Trends

According to data from Statista, the homeownership rate in the United States stood at approximately 65.8% in 2020. This figure peaked at 69.2% in 2004, subsequently declining significantly following the economic downturn between 2007 and 2009.

The rate then recovered to 63.7% in 2016, and has been gradually increasing since.

Landis Secures $165 Million in Funding

To further its core mission, Landis has successfully secured $165 million through a combination of debt and Series A equity financing.

Sequoia Capital spearheaded the investment round, with participation from Arrive, the venture investment division of Jay-Z’s Roc Nation, Dreamers VC, founded by Will Smith, and existing investor Signia Venture Partners.

Notably, founders from companies like Plaid, Cash App, Ethos, Instacart, Front, Flatiron Health, and Tango also contributed to this funding initiative. This recent capital injection elevates Landis’ total funding to $182 million.

A Focus on Financial Empowerment

Roelof Botha, a partner at Sequoia, emphasized Landis’ impact, stating, “Landis empowers families to take their initial steps toward homeownership.”

He further explained that by prioritizing financial education and personalized guidance, Landis extends the opportunity of homeownership to a broader audience. Botha highlighted the particular relevance of Landis’ technology for individuals with low-to-moderate incomes who are often underserved by conventional financial solutions.

The Genesis of Landis

Landis was established in 2018 by Cyril Berdugo and Tom Petit. They shared with TechCrunch that the company’s inception stemmed from observing renters experiencing financial disadvantages.

For instance, they witnessed individuals paying $1,700 monthly for housing, while a mortgage for a comparable property would only cost $1,000.

Connecting Prospective Homeowners with Opportunities

The New York-based fintech firm collaborates with real estate agents and mortgage lenders to connect with potential homeowners.

These individuals often face challenges in qualifying for a mortgage due to factors such as poor credit history, insufficient down payment savings, or existing debt obligations.

A Pathway to Mortgage Readiness

Landis utilizes its proprietary underwriting technology to assess a client’s potential mortgage affordability within the next 12 to 24 months.

If deemed feasible, Landis provides the client with a property budget, purchases the home, and then rents it to the client while they work towards improving their financial standing and achieving mortgage eligibility.

A Partnership Approach

Berdugo and Petit characterize their relationship with clients not as a traditional landlord-tenant arrangement, but rather as a collaborative partnership.

They have also learned from their clients the importance of school districts in home purchasing decisions, and the desire to provide equal opportunities for their children’s success.

Client Motivation and Success

“Our clients demonstrate a higher level of motivation compared to typical renters, actively striving to improve their savings,” Petit noted. “This dedication is yielding positive results.”

He added that the team also appreciates the clients’ proactive engagement, seeking advice and diligently working to meet their goals.

Future Expansion and Improvements

Berdugo indicated that the funding will be allocated towards expanding operations into new states, increasing the Landis team, and enhancing the user experience.

While he did not disclose the specific breakdown between debt and equity, or detailed growth metrics, he emphasized the strategic rationale behind the funding round.

Geographic Focus

Currently operating in 29 cities across 11 states, Landis intends to extend its reach to 20 states by the following year.

Berdugo and Petit are prioritizing states where the impact will be most significant, particularly those with disproportionately high rental costs.

Landis Homeownership Coach App

Landis has also announced the free availability of its Landis Homeownership Coach mobile app to all iPhone users.

The app offers a comprehensive overview of credit scores, down payment progress, and debt levels, providing clients with actionable insights and guidance to achieve mortgage qualification.

Bridging the Financial Literacy Gap

“Disparities in financial literacy and access to financial services are interconnected,” Berdugo explained. “Individuals with low-to-moderate incomes often lack access to the same resources as wealthier individuals, and we are striving to address this gap by providing financial education and services to help them become mortgage-ready.”