PropTech/Fintech Delights & Distresses

David Goldsmith

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Proptech, meet fintech: HomeLight raises $60M and gobbles up Accept​

“Extension” of Series D values firm at $1.7B​

The proptech firm HomeLight has acquired the fintech and raised an additional $60 million in equity financing from Zeev Ventures.
The fundraise, which the San Francisco-based startup billed as an extension of its Zeev-led $100 million Series D round last September, values the company at $1.7 billion — just above its $1.6 billion valuation last year. It also secured $50 million in debt capital.

HomeLight, which early last year was reported to be nearing an IPO, seeks to streamline the homebuying process by facilitating contingency-free, cash transactions. It has now raised $645 million in equity financing.

HomeLight said it used stock to acquire Denver-based Accept, a self-described iLender that facilitates cash offers for mortgage-ready buyers, but it did not disclose an equivalent dollar value. It now claims to be the largest “agent-focused cash offer program” in the country, having completed a combined $3 billion in referred transactions in the first quarter.

The acquisition — HomeLight’s third M&A deal in three years — and new funding comes at a tumultuous time for technology startups, which have narrowed their focus and cut costs amid macroeconomic turmoil and a more stringent fundraising environment.

Venture capital has continued to flow into proptech, but its pace has moderated, and startup valuations have come down as newly cautious investors have demanded more favorable terms, according to venture capitalists in the space.
“Flat is the new up in this market,” said HomeLight founder and CEO Drew Uher.
Recent belt-tightening has been particularly hard on later-stage startups, which during the pandemic-era investment boom raised piles of cash at ever-higher valuations in a frenzied pursuit of growth. Lately many have resorted to layoffs, including most recently at the digital mortgage lenders Tomo and, and the brokerage Side.

Founded in 2012 with investments from Google Ventures and Group 11, HomeLight says its cash offer program’s transaction volume grew six-fold over the past year (Uher declined to disclose revenue or other performance metrics.) It offers the program in Arizona, California, Colorado, Florida and Texas, and will expand in the next few months into Accept’s other domains, which include Minnesota and the Portland and Seattle markets.

There will be no near-term layoffs associated with the acquisition, according to Uher. But given the shift in investor sentiment, the days of rapid growth for startups like HomeLight are clearly over.
“We have reworked our hiring plan to be much more conservative through the end of the year,” he said.
HomeLight acquired, a provider of listing management tools, in 2020. The previous year, it bought the digital mortgage lender Eave.

David Goldsmith

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Staff member

Zumper slashes 15% of staff​

Cuts at online rental platform add to slew of tech layoffs​

Zumper, an online rental startup recognized last year as a top employer on multiple best-of lists, cut 15 percent of its approximate 300-person staff last Friday, The Real Deal has learned.
The majority of the cuts hit the San Francisco-based company’s sales and customer service departments, according to an axed employee who spoke on condition of anonymity. Members of the art department also were let go, per a LinkedIn post from a graphic designer who was among them.

Workers were sent notifications on Thursday for a next-day Zoom call outside of normal work hours, during which Zumper higher-ups communicated that the layoffs were budget-related, not performance-based, sources said.

“[W]hile I get the economics behind it this stings,” Casey S., a former customer service employee, said in a Tuesday LinkedIn post.
Zumper could not be reached for comment.
The cuts, the latest casualties of the ongoing tech rout, came amid a slew of layoffs at public and private real estate firms, including brokerages Compass, Side and Redfin and digital mortgage lenders Tomo and

Adverse capital market conditions stemming from rising interest rates have forced many companies to rein in spending, and head count is typically where cost-cutting starts.

Zumper, co-founded in 2012 by CEO Anthemos Georgiades and Russell Middleton, has raised some $179 million in equity financing through at least six funding rounds, including a $60 million Series D led by in early 2020, according to Crunchbase. Last year the company was reported to be nearing an IPO.
A private company that operates in residential rentals, one of the more resilient commercial real estate segments, Zumper has been shielded somewhat from recent stock market volatility. But interest rates and inflation, and trepidation about a likely recession, have sapped venture capital’s appetite for risk, too.

The Federal Reserve raised a key interest rate by 75 basis points on Wednesday in a bid to stem inflation — the sharpest increase since 1994. The consumer price index, meanwhile, reached its highest level in more than four decades in May, driven by rising food and energy costs. The combination of factors pushed the S&P 500 into bear market territory.

A recent Zumper report showed rents nationally hit another all-time high in May. Higher unemployment during a recession could trigger rental defaults, creating headwinds for landlords and the proptech platforms that service them.
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David Goldsmith

All Powerful Moderator
Staff member
SEC probing Better as SPAC deadline looms

Barclays, Citigroup exited as deal advisers​

Things keep getting worse for Better.

The U.S. Securities and Exchange Commission is probing the digital mortgage lender, according to a regulatory filing reported by Inman. Better and Aurora Acquisition Corp., the SPAC formed to take Better public, are cooperating with the voluntary request for documentation.

The examination came out of a lawsuit filed by Sarah Pierce, the former executive vice president for sales and operations. Pierce accused the digital mortgage lender of misleading investors, claiming CEO Vishal Garg told investors the company would be profitable sooner than internal projections showed and falsehoods about the volume of direct-to-consumer loans that came from internet traffic not generated by paid marketing efforts.

Pierce claimed in the suit she was forced out at the beginning of the year after raising concerns.
The SPAC deal was agreed to in May 2021, but hasn’t closed yet. The companies are facing a Sep. 30 deadline to complete the merger.
That became more complicated after two of the deal advisers resigned from their roles. Better and Aurora said Barclays resigned on June 22, and Citigroup resigned the following day. Bank of America, which was acting in an unofficial capacity, is also no longer involved.

Better and Aurora said the resignations shouldn’t delay the public process and they’re moving full steam ahead on the merger. They acknowledged, however, that the deal is looking more fraught than ever, saying they’ve had “preliminary conversations about potential structures where the business combination would be terminated and Better would remain a private company.”

Better is having a very bad year. The company in April cut a “substantial” amount of employees, its second round of layoffs in as many months. In March, the online mortgage startup laid off 3,000 workers in the United States and India, a process reportedly marred by some learning of their job loss after severance payments rolled out prematurely.
In December, Garg took a leave of absence after firing more than 900 workers via Zoom and accusing some in an anonymous online post of being unproductive and stealing from the company. That led to an internal review and the resignations of several executives.

David Goldsmith

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Chera family fails to raise cash for Brivo proptech merger​

Crown Proptech Acquisitions needed $95M to take the company public​

One of New York City’s biggest retail landlords has come up short in an effort to invest in protech company Brivo, a maker of card-swipe and other keyless-entry technology.
The Chera family had targeted the Nevada-based firm to combine with its own special purpose acquisition company, or SPAC, but missed a July 9 deadline to consummate the merger.

Crown Proptech Acquisitions, led by CEO Richard Chera, failed to drum up the necessary cash, according to a person familiar with the deal.
The merger would have made Brivo a publicly traded company, unlocking hundreds of millions of dollars in investor cash and giving Crown a front seat at the bonanza. Now the $276 million that Crown raised by selling shares in its SPAC will likely be returned to investors.

Chera disclosed Thursday in an SEC filing that the SPAC did not have $95 million in unrestricted cash, which would have allowed it to secure an additional $75 million from investors and close the merger.
The filing noted that after the merger deadline expired, $68 million in investment commitments were withdrawn by Golub Capital, an investor otherwise ready to close the deal, the person said. Golub had secured a seat on the board of the would-be public company.

Brivo claims to have 20 million users who employ its technology to gain access to 70,000 real estate locations in the U.S.

Crown and Brivo did not return requests for comment. A representative of Golub declined to comment.
SPAC deals rocketed to popularity as an under-the-radar way to take companies public after high-profile flameouts of traditional IPOs, such as WeWork’s in 2019.
Years of cheap borrowing followed by government responses to the pandemic had kept capital markets flowing. But a merky track record for SPAC investors combined with rule changes and increased borrowing rates have complicated the picture.

Among derailed SPAC dreams: Fifth Wall’s decision to not pursue a second such deal, and Goldman Sachs’ exit from the SPAC market all together.

David Goldsmith

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Seattle real estate startup Flyhomes cuts 20% of staff, citing ‘uncertain economic conditions’
Seattle real estate startup Flyhomes cuts 20% of staff, citing ‘uncertain economic conditions’

Flyhomes is the latest tech startup to cut jobs.

The Seattle real estate company laid off approximately 20% of its staff, a spokesperson confirmed to GeekWire. The company did not provide an updated headcount. It has 763 employees, according to LinkedIn. One employee said 200 workers were let go.

Tech firms across various industries are laying off employees or freezing hiring as a way to curb expenses amid the current downturn. Rising interest rates are affecting U.S. home sales, which has forced real estate companies such as Flyhomes and others to trim headcount.

Flyhomes cited the impact of interest rate increases on demand for housing in a statement about its layoffs.

“To build the world’s best home buying and selling experience, we must operate in a manner that is both fiscally prudent and sustainable in the face of uncertain economic conditions,” the company said.

Redfin, another Seattle real estate company, laid off 8% of its workforce last month. Compass also cut jobs and shut down its Seattle-based title business.

Other Seattle-area tech startups including Convoy, Qumulo, and Esper have laid off employees in recent months. Google is freezing hiring for two weeks, The Information reported Wednesday.

Founded in 2016, Flyhomes helps people buy homes using a cash offer program which presents customers as the equivalent of cash buyers. A majority of the company’s revenue comes from agent commissions.

The startup also offers mortgage services and has a Buy Before You Sell program that helps sellers buy and move into their next home before selling their current property.

Flyhomes has helped customers buy nearly $3 billion worth of homes.

The company is led by CEO and co-founder Tushar Garg. It has raised more than $200 million to date, including a $150 million Series C round raised in June 2021. Investors include Norwest Venture Partners, Battery Ventures, Fifth Wall, Camber Creek, Balyasny Asset Management, Andreessen Horowitz, Canvas Partners, and former Zillow Group CEO Spencer Rascoff.

David Goldsmith

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Metaverse land prices down 80% in six months​

“The metaverse had so much hype at the beginning of the year and we’ve kind of lost it."​

The digital environs of the metaverse are not enough to protect virtual property owners from a downturn towards reality.
After surging in the fall, metaverse real estate values are plummeting, The Information reported. The drop in value and sales volume comes alongside a similar drop in the value of cryptocurrency and NFT prices in recent months.

Metaverse real estate trade volume rose in November, following Facebook’s rebrand to Meta Platforms. The rebrand highlighted the metaverse’s potential to a larger audience who saw one of the world’s biggest technology companies leaning into the virtual world.
It’s been a rough ride since. Trading for land on six platforms, including Decentraland and The Sandbox, is down 97 percent from its November peak, according to data from WeMeta. Trading volume topped out with $229 million in November, before sliding to only $8 million in June.

Total sales and the average price of land are also drawing premonitions of the blue screen of doom. Total sales fell from 16,000 in November to 2,000 in June. The average price of land, meanwhile, was $3,300 in June, down nearly 80 percent from a peak of $16,300 four months earlier.

The decline in cryptocurrency prices is only partially tied to the fall. From February to June, the average sales price fell 58 percent on a crypto-denominated basis.

MetaSpace REIT founder Eric Klein
“The metaverse had so much hype at the beginning of the year and we’ve kind of lost it,” Eric Klein, founder of MetaSpace REIT, told the outlet.

Commercial real estate in the metaverse has been viewed as one of the next frontiers. Much like the physical world, property owners develop land by creating virtual storefronts and selling or renting to companies looking to sell items or employ marketing.
As the macroeconomic picture in the physical world grows worrisome for many, the the still-limited market of the metaverse is losing appeal. Some companies are starting to think the payoff isn’t worth the problems the metaverse brings.
Many people still have a vested interest in the success of the metaverse’s real estate gambit, however, and see brighter days ahead. Klein said the promise of metaverse real estate will “come to fruition within the next couple of years.”

David Goldsmith

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Power buyer Homeward lays off 20% of staff​

Move follows cuts by rivals Knock, Orchard​

Homeward doesn’t feel like home to 20 percent of its staff who were laid off by the power buyer.
The Austin-based company cut a fifth of its staff in response to the housing slowdown, Inman reported. The company employed about 600 people prior to the cut, meaning around 120 were affected.

“The shifting market and decrease in contract activity have resulted in more headcount than necessary — we have to adjust our business to accommodate the new reality we’re in,” a company spokesperson said in a statement.
The move comes two months after Homeward founder Tim Heyl expressed optimism to employees that the company wouldn’t follow in the footsteps of rivals Knock and Orchard, which had their own cuts in recent months. But Heyl this week walked back the reassurance, telling employees the “continuing acceleration and severity of the market shift has forced us to consider deeper changes to our business.”

Affected employees will receive severance based on time with the company. Most affected employees will also have non-compete clauses waived.

The homebuying startup’s key offerings included a “buy before you sell” program and a “buy with cash” program, loaning prospective buyers money to make cash offers on a home and promising to buy their old home if they can’t sell it. The company had one of the largest proptech funding rounds of 2020, raising $105 million.
But buyers have started to retreat from the housing market due to low inventory, high prices, higher mortgage rates and general economic uncertainty. Fewer buyers means fewer people wanting to take advantage of homebuying programs.

Despite the layoffs, Homeward maintains it is poised for long-term growth.
The size of the startup’s layoffs rank near the middle of significant cuts by power buyers in recent months. In March, homebuying startup Knock ditched its plans for an IPO and laid off roughly 46 percent of the staff. More recently, Ribbon laid off about one-third of its staff, while Orchard laid off 10 percent of its workforce.

David Goldsmith

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Digital mortgage firm Blend loses $478M, sheds more of workforce​

Company went public last July at $4B valuation​

A digital mortgage firm has cut another sizable chunk of its workers in its second major round of layoffs this year.
Blend Labs eliminated 220 jobs in August, HousingWire reported. On top of 200 jobs cut in April, the company has chopped approximately 25 percent of its workforce this year.

The company said it expects to save $60 million annually after the two rounds of layoffs, though the impact won’t be felt until next year.
“We’re operating the company prudently as if the mortgage industry origination volumes will remain at or near historic low levels through 2025,” CEO Nima Ghamsari said this week in an earnings call.

The latest layoffs come as the California-based company reported a massive loss in the second quarter. After posting a $73.5 million loss in the first quarter, Blend upped that to a $478.4 million loss in the second quarter. The loss was largely attributed to a $392 million impairment stemming from an update to the value of Title365, acquired last year.

Blend reported $31.9 million in revenue during the second quarter, down from $38.7 million in the previous quarter. To generate more revenue, the company said it plans on prioritizing products with a quicker return on investment and raising prices per transaction.
The digital lending platform was founded in 2012 and went public last July, sporting a valuation of $4 billion. But the company hasn’t been immune to the mortgage market downturn spurred on by rising rates.

Applications for home loans last week fell another 2 percent from the previous week, bringing demand to its lowest level since 2000, according to the Mortgage Bankers Association. Rates were sent upwards in recent months after the Federal Reserve raised interest rates in an effort to slow down inflation.

Mortgage companies have been bearing the brunt of the destruction brought on by the reduction in demand. Sprout Mortgage went out of business, costing more than 300 employees their jobs. Texas-based First Guaranty Mortgage essentially shut down.
Other companies have significantly reduced their mortgage arms, with cuts from firms including JPMorgan Chase, Wells Fargo, Mr. Cooper, Tomo, Homelight, Keller Williams, Movement Mortgage and

David Goldsmith

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Tishman Speyer-backed Latch says its financial statements can’t be relied upon​

Proptech startup that went public via SPAC warns of "material errors"​

Smart-lock maker Latch said its financial statements for 2021 and the first quarter of 2022 are unreliable.
The Chelsea-based company, backed by Tishman Speyer, warned the SEC of “material errors and possible irregularities” in its financial reporting, Crain’s reported. The startup is conducting an internal investigation into the issue.

An SEC filing shows the company’s audit committee launched an investigation on Aug. 10. The issues and irregularities stemmed from how Latch “recognized revenue associated with the sale of hardware devices” during the year-plus period. The company said it plans to restate its financial statements for the affected quarters.
Latch’s internal investigation found “unreported sales arrangements” from sales activity “inconsistent with … internal controls and procedures,” according to the filing. The company noted that finding irregularities going further back in time is not beyond the realm of possibility.

Latch was founded in 2017, also specializing in building management software. Two years later, it raised $126 million through a Series B funding round, which had investors such as Tishman and Brookfield. The company was valued at $454 million at the time.

Latch went publiclast year after merging with Tishman’s special-purpose acquisition company. The company had an expected valuation of $1.56 billion when the SPAC deal was reported last January.
The public company’s trading took a turn for the worse in recent months. Investors started aggressively selling after Latch shares dropped in value and a lockup period ended.

Latch has executed three rounds of layoffs this year alone, letting go of more than half its staff. The stock dropped to $1 on Friday.
The value of the stock could be the just the latest of Latch’s problems. After disclosing the financial irregularities to the SEC, the company received a notice warning that it was no longer in compliance with Nasdaq and could be delisted from the stock exchange.
Latch has until Oct. 10 to submit a plan to Nasdaq to regain compliance with its regulations, according to the notice.

Chera’s proptech SPAC blames startup for breaching deal
Chera’s proptech SPAC blames startup for breaching deal

David Goldsmith

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Proptech firm Juniper Square lays off 14% of staff​

Company says cuts affect “sales organization and other ancillary functions”​

Juniper Square has laid off about 14 percent of its staff, joining the growing list of proptech firms cutting headcount.
The San Francisco-based company creates software for general partners and limited partners in commercial real estate deals to connect and communicate with each other. Its clients include top real estate players such as Tishman Speyer, Greystar, and Bell Partners.
“The reduction in force targeted our sales organization and other ancillary functions. This decision was a response to changing macroeconomic trends and strengthens our already strong financial position,” a Juniper Square spokesperson said in a statement. “We plan to continue to hire aggressively in our customer service teams, and we do not anticipate any interruption or impact on our ability to support current and future customers.”

It is not clear how many employees will be jettisoned. The firm declined to provide an exact number. According to LinkedIn, the company has 469 employees.

“Some employees were offered other opportunities with Juniper Square and that process is still ongoing,” said the spokesperson.
Juniper raised $25 million in Series B funding in 2018 and the next year raised a $75 million Series C, led by investors Redpoint Ventures. Participants included Ribbit Capital, Felicis Ventures and Zigg Capital.
The company said its customers manage nearly $800 billion worth of real estate.
“Our vision is that one day, an institution or individual could invest in a share of a commercial building just like they would in a share of stock on the NYSE,” said co-founder and CEO Alex Robinson in announcing the firm’s Series C.
Some proptech firms have struggled as raising capital has become more difficult. Higher interest rates have also led to fewer real estate transactions and thus less demand for technology to service real estate deals.
In August, digital mortgage company Blend Labs eliminated 220 jobs. Also last month, Smart-lock maker Latch, which is backed by Tishman Speyer, said financial statements for 2021 and the first quarter of 2022 are unreliable.

David Goldsmith

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Andreessen-Backed Divvy Homes Lays Off 12% of Staff as Rates Rise​

Divvy Homes, a property tech startup backed by Andreessen Horowitz and Tiger Global Management, laid off about 12% of its staff Tuesday. The cuts reflect how younger real estate firms are responding to rising mortgage rates that have battered the home-buying market.
The layoffs affected roughly 40 employees at the five-year-old firm. Divvy Homes buys homes in the U.S. and rents them to people who don’t have the credit history or savings to buy, but hope to eventually purchase the homes.