Figure, a startup that doubles as a home equity line of credit lender, has raised $65 million in equity funding, the company announced Wednesday.
Figure, a real estate startup that makes home equity line of credit (HELOC) loans using blockchain technology, has raised an additional $65 million in equity funding, the company announced Wednesday.
Launched last year by Mike Cagney, the founder of Social Finance, or SoFi, the San Francisco-based company received the Series B round from investors including RPM Ventures, DST Global, DCG, Nimble Ventures and Morgan Creek. The round brings total funding to $120 million.
“We are encouraged by what we’ve accomplished in our first year, and this investment validates Figure’s market potential,” Cagney said in a statement.
In October, Figure announced a home equity loan product that borrowers can purportedly qualify online for in five minutes and close within five days. At the time, the loans ranged in size from $15,000 to $100,000, and Figure claims it has made 1,500 of the loans to date.
But in November the startup launched an even more ambitious service. Cast as an alternative to a reverse mortgage, Figure Home Advantage (FHA) invites homeowners to “sell your house, keep your home.” Coincidentally or not, FHA is also the acronym for the Federal Housing Administration, an agency that insures its own reverse mortgage, the “Home Equity Conversion Mortgage.”
The product allows homeowners to sell homes to Figure and lease them back as renters who can “stay as long as you like,” provided rent is paid.
The company appears to be similar to iBuyers like Opendoor, in that it purchases a home on a seller’s timeline.
The product’s website claims customers receive “up to 92 percent” in upfront cash, compared to what it says is a reverse mortgage’s typical range of 38 to 60 percent. Figure notes that, as is typically the case for a property owner, it will cover all property expenses, including taxes and upkeep insurance. The service resembles another unveiled in October by Irene, which announced a $1.3 million funding round in May.
Figure Home Advantage doesn’t advertise any fees for the product. Figure didn’t immediately respond to email questions, including whether Figure essentially buys homes from Figure Home Advantage customers at up to 92 percent of their market value.
“FHA [Figure’s alternative to a reverse mortgage, not an FHA reverse mortgage] is being rolled out across Texas, Illinois and Nevada now, with plans for a national rollout midyear,” Figure said in a statement.