Two proptech firms that aim to help homebuyers compete in hot markets are steps closer to going public after naming new executives.
New York-based Orchard tapped Patrick McClymont, former chief financial officer of IMAX and auction house Sotheby’s, as its CFO last month, the Wall Street Journal reported. And HomeLight, a Bay Area startup, appointed to its board Sean Aggarwal, chairman of Lyft and former CFO of Trulia, according to Bloomberg News.
Both companies try to make purchasing a home easier by fronting prospective buyers the funds to make all-cash offers. It’s a service in high demand in a market where sellers don’t want to bother with mortgage contingencies and individual buyers compete with each other and cash-flush private equity for a scant supply of housing. The startups claim to give regular people a fighting chance at snagging a home.
Orchard lets customers buy before they sell their current home to ensure they’re not searching for somewhere to stay once they hand over the keys. The proptech funds customers with up to 90 percent of their home’s equity so they can make a cash offer on a house. Then it arranges the sale of the customer’s old home and takes a transaction fee.
HomeLight functions similarly, providing funds to buyers who have yet to sell their current home, enabling them to make a cash offer, Bloomberg reported. The platform also allows sellers access to a network of pre-approved cash buyers to speed up the sale.
Neither company has put a date to an IPO. Orchard’s Chief Executive Officer Court Cunningham expects to raise more in venture capital before taking the plunge.
Founded in 2017, Orchard has raised around $148 million from firms that include FirstMark Capital and Revolution Growth, the Journal reported.
HomeLight was last valued at $498 million according to PitchBook data reported by Bloomberg, though the company is expected to debut at a premium. The proptech startup counts Citi Ventures, Google Venture and Menlo Ventures among its investors. It scored a $100 million credit facility from Credit Suisse Group AG last month, pushing its total asset-backed facilities to $200 million this year.[WSJ, Bloomberg] — Suzannah Cavanaugh