ZeroDown, a San Francisco-based rent-to-buy startup aimed at giving prospective buyers a path to homeownership, has raised $100 million in debt financing from investment bank Credit Suisse, the company announced Monday. The influx of capital will help fuel the company’s rapid growth as it’s seen demand climb since launching in June.
“ZeroDown has received an overwhelmingly positive response during the past few months and has provided San Francisco residents with the means to buy their dream homes,” said Scott Lustig, director of capital markets at ZeroDown, in a statement. “This additional funding from Credit Suisse enables us to accelerate our mission of giving homebuyers greater power and flexibility in the home buying process.”
ZeroDown said it’s seen customer demand quadruple since its public launch earlier this summer.
The company buys the home and the renter moves in, accumulating purchase credits that represent a percentage of the home’s value each month. As long as the renter stays in a ZeroDown home for two years – and are current on all payments – they can use the purchase credits toward a down payment on that house or move and cash out by redeeming those credits.
To get approval, prospective applicants need to link their bank account to give the company a picture of their finances and see how much they can afford – ZeroDown will only do a soft credit pull. That applicant will then be connected to a partner real estate agent — the company currently has a partnership with Berkshire Hathaway HomeServices Drysdale Properties — which will help them find and tour properties for sale in their preferred neighborhoods. Once the applicant and agent have worked together to choose the home, ZeroDown will close on the home.
In addition to the recent debt financing round, ZeroDown has raised $30 million in equity funding from Sam Altman and Goodwater Capital.