EasyKnock, a home sales-leaseback company that allows homeowners to release the equity on their home, has closed $3.5 million in seed funding, company executives announced.
Montage Ventures, Crestar Partners and Blumberg Capital contributed to the new funding round. The seed round follows on the heels of a $1.2 million investment in 2017 and will go toward hiring talent, launching partnerships, expanding into new markets and developing an artificial intelligence component that helps identify potential customers, said company executives and new investors in an announcement issued Wednesday.
“U.S. consumers are sitting on over $14.5 trillion in home equity, yet there are few options for them to access this capital,” said Matthew Murphy, a partner at Montage Ventures, in a prepared statement. “We’re excited to partner with EasyKnock to offer this unique platform as it will help homeowners unlock the value of their home without having to move.”
Launched in 2016, the New York-based startup offers homeowners who need to refinance their debt a new solution by buying their home in cash and then renting it back to them. This summer, EasyKnock also partnered with LendingTree to reach homeowners who need this type of solution. The company allows customers who would have otherwise had to sell their homes to stay and rent while they work their way back to homeownership.
EasyKnock co-founder Jarred Kessler told Inman millions of homeowners are desperately strapped for cash but, for one reason or another, cannot access the equity on their home. In some cases, they have high-interest debt or are small business owners who do not receive a W2 like a salaried employee.
“For those people, the only option is to sell their home if they want to get that equity,” said Kessler, adding that the startup gives its customers the opportunity to tap that money and then rent their old house at market rate. “We’re bringing in a new option for people who need to consolidate their debt.”
“We’ve had a good cross-section of people who understand the real estate world and people who understand the technology world validate our product,” Kessler added.