Lennar is a builder, known for breaking ground on new construction throughout the country. But in the past six months, the 64-year-old company has co-led a $325 million tech startup funding round, debuted exhibition smart homes in partnership with Amazon and put its traditional new-build customers in the iBuyer pipeline.
Even as Lennar continues to build and build, as it’s always done, the company doesn’t want to get left behind.
“By investing, we get a seat at the table,” former Lennar CEO Stuart Miller told Inman. “We become participatory in developing technology. We leave technology to the technologists and benefit from their strategy that might be different from our own.”
Miller, son of Lennar co-founder Leonard Miller and now executive chairman of the company after over 20 years as CEO, said that Lennar started looking toward tech investments about 10 years ago. Recent years and months have seen an escalation of those efforts, even as at the same time Lennar is navigating its $9.3 billion acquisition of fellow homebuilder CalAtlantic.
Lennar invested with Opendoor, the leading iBuyer buying and reselling homes online, in 2016. Then this month, Lennar co-led Opendoor’s $325 million Series E funding round — a massive capital raise for a Silicon Valley startup. The funding round put Lennar in league with New York investment firm General Atlantic and Facebook and Amazon investor Access Technology Ventures, the other two leaders of the Series E.
In the year-and-a-half between those investments, Lennar developed a close relationship with Opendoor that includes a partnership allowing homeowners to sell their homes to Opendoor and immediately “trade up” to a move-in-ready Lennar home. Opendoor has now extended that partnership beyond Lennar to any builder.
“As Opendoor sought to raise its next round of capital for expansion, we didn’t have to be convinced to lead the round,” Miller said. “We wanted to lead the round because we saw the opportunity was really maturing itself. We wanted them to be facilitated to move into more of our markets.”
Lennar, used to the capital-intensive business of real estate, wasn’t scared off by Opendoor’s nine-figure goals.
Outside of its investment in Opendoor, Lennar has invested in the lending startup Blend, which cuts down on the time required for mortgage approval. The data-focused company comes from former engineers at Palantir, the data intelligence company launched by controversial Silicon Valley investor Peter Thiel.
Like its involvement with Opendoor, Lennar’s investment in Blend was joined by a partnership. Lennar partnered with Blend on developing Eagle Digital Mortgage, a digital mortgage product.
Lennar invested in the insurance startup Notarize, a company that also saw investment from Realogy, another traditional player in real estate gravitating toward technology.
And outside its investments, Lennar has pursued major technology partnerships. Lennar homes are now being used as Amazon exhibition smart homes across the country that show what a house tricked out with every home tech product Amazon has to offer would look like.
“We don’t view ourselves as venture capitalists,” Miller said. “We view ourselves instead as a homebuilding company that’s making sure that we’re engaged in emerging technologies that are going to impact our business.”
Lennar is interested in categories of technology that will affect its customers as a homebuilder.
Right now, that’s a lot of mortgage, title and technology for real estate agents. But in the future Lennar will look toward technology “around the way we build homes, architecture, the way we deliver homes and how homes are maintained after we close on a home,” Miller said.
If Lennar can use its resources to back a startup that makes the mortgage process faster, Lennar can get its customers into their new Lennar homes quicker. If Lennar’s money helps Opendoor continue to grow beyond its current 11 markets, then more Lennar customers can sell their old homes to Opendoor and move into a Lennar home faster.
More and more real estate companies are touting their commitment to technology. Lennar is one that has the resources to make those bets on a large scale.