Term sheet obtained by Inman reveals Series B funding round will shift control of company’s board from founders to investors.

A year after raising $30 million, real estate tech firm Remine is whipping up another round of funding, but on terms that indicate the company’s valuation has plunged and its investors are holding the founders’ feet to the fire.

In a term sheet obtained by Inman and confirmed as authentic by Remine, two of Remine’s previous investors — New York-based growth equity firm Stripes LLC and Canada-based boutique investment firm Ayrshire Real Estate Technologies LP — have agreed to invest about $4 million and $2 million, respectively, in Remine as part of a Series B round in which Remine hopes to raise a total of about $14.1 million from new and existing investors by or before May 30.

The funding will be used “for working capital and other general corporate purposes.” Remine counts some 50 multiple listing services representing more than 1 million subscribers as customers, the latest of which is the Miami Association of Realtors.

Stripes lead Remine’s Series A round last year, though Remine would not disclose how much the firm contributed. Stripes has also invested in companies such as Refinery29, Flatiron Health, GoFundMe, Blue Apron, Upwork, SPINS, Sift and Gimlet Media.

That Series A round made Remine a shining rarity among real estate tech firms raising venture capital funds. According to private capital market research firm PitchBook, Remine’s post-money valuation after its Series A last year was $120.7 million. By comparison, the median Series A deal size for real estate tech firms since 2019 was $8 million with a median post-money valuation of $40 million — not far from the median for all companies.

Median deal size Median pre-money valuation Median post-money valuation
Series A round in the U.S. since 2019

All deals (n=2,257)

$8M $21.4M $32.5M
Median Series A round in the U.S. since 2019

Real estate tech deals (n=58)

$8.02M $27.9M $40M

Source: PitchBook

But that changes with this Series B. In early March, when Remine laid off 38 employees, rumors swirled that the company was running out of money and the layoffs were an attempt to both stay afloat and position the company for a sale, possibly to venture capital-backed brokerage Compass. At the time, Compass declined to comment on whether it had met with Remine to explore a possible acquisition or whether it was considering an acquisition.

Now, the term sheet indicates Remine’s valuation may have fallen drastically. Two financial experts Inman contacted said the Series B term sheet indicated a substantial down round, with a potential post-money valuation around $30 million to $40 million. The experts spoke on condition of anonymity due to the sensitive nature of the information.

By contrast, the median Series B pre-money valuation since 2019 for real estate tech companies is $90 million and the median post-money valuation is $114.2 million, according to PitchBook data. For real estate tech companies that have raised both a Series A round and a Series B round since 2016, the valuation step-up from the Series A post-money valuation to the Series B pre-money valuation was 2.37x, from $38 million to $90 million, PitchBook said.

Companies typically increase in valuation from a Series A to a Series B.

Tech company valuations are expected to fall across the board this year as a result of the COVID-19 pandemic, but Remine’s troubles appear to predate the crisis. The company laid off 42 members of is sales staff a month after raising its Series A and in October pulled an agent-matching feature after blogger and software entrepreneur Greg Robertson voiced concerns about the company’s use of MLS data. In February, a security blunder left Remine’s system wide open to hacking, potentially exposing private agent and consumer information. Shortly thereafter, on March 9, the company laid off 38 employees. Remine said the lay-offs weren’t related to the security issue.

According to the term sheet, at least $3 million — half of what Stripes and Ayrshire have committed to — closed on March 30. The money comes with hefty strings. According to the term sheet, Remine’s board of directors will shrink from seven members to five — two of which will be chosen by Stripes and one of which will be chosen by Ayrshire. The move essentially turns over control of Remine’s board from the founders to the investors.

Ron Shah

According to a Securities & Exchange Commission (SEC) filing from last year, Remine’s board members are:

  • Leo Pareja (Remine co-founder and president)
  • Jonathan Spinetto (Remine co-founder and COO)
  • Mark Schacknies (Remine co-founder and CEO)
  • Daniel Huertas (Remine co-founder and CEO of Washington Capital Partners, which he co-founded with Pareja)
  • Brian de Schepper (Remine investor, former director of MLS and industry relations at Zillow)
  • Phil Swift (chairman of Ayrshire)
  • Ron Shah (Stripes partner)

Phil Swift

Now, Schacknies and Spinetto are the only Remine co-founders that will remain as directors on the board “for so long as they are employed by the company.”

Jonathan Spinetto

The term sheet dictates that Stripes, Ayrshire, and another Remine investor — Moody’s Analytics — retained their rights to appoint observers to the board and that Pareja will be an observer following the closing of the funding round “as long as he owns at least 5% of the Company and does not sell any shares.” Observers attend board meetings but don’t have voting rights.

Leo Pareja

Rubbing salt in the wound, Remine’s founding shareholders — Schacknies, Spinetto, Pareja, Huertas and de Schepper — agreed to a re-vest of 80 percent of the shares of common stock that each founder received in connection with the founding of the company. This would take the unrestricted shares the founders gave themselves when they started the company and essentially make the founders earn them over a four-year period.

Brian de Schepper

The term sheet puts the four-year start date at January 1, 2019 and the shares would vest on a monthly basis through 2022 — but only “during such periods that such Founder was employed by the Company and making material, demonstrable contributions.”

According to the term sheet, as of the end of March, Huertas would own 20 percent of his founder shares, de Schepper would own 40 percent of his founder shares, and Schacknies, Spinetto and Pareja would own 45 percent of their founder shares. Pareja’s shares are guaranteed to vest through March 31, 2021.

Daniel Huertas

This would seem to indicate that Stripes and Ayrshire are seeking to goose the founders’ performance. If they don’t see an improvement, the investor-controlled board would theoretically then be able to remove them and the shares that haven’t vested, which could make the company more attractive to a buyer. Or, more likely, allow the board to change management by giving their remaining stock options to new management.

Mark Schacknies

Asked for comment, Remine CEO Mark Shacknies said in an emailed statement that Remine had closed the initial Series B funding with its lead investors on March 30 “to fuel our growth and expansion of our MLS front end, SSO [single sign on], add/edit, and transaction management platform. High growth tech companies often raise money (e.g. Redfin just sold $110m of stock) to fuel their growth. While we cannot comment on the valuation or terms, we are fortunate to have investors who support our vision, especially in a time that is difficult to so many.”

Tom Ferry

Stripes, Ayrshire, and Moody’s Analytics did not respond to requests for comment. We will update this story if and when we hear back.

Real estate coach Tom Ferry, who is also a Remine investor, said in an emailed statement that he is “happy” with his “small investment in Remine” and has “faith in the product, leadership team and their mission.” He declined to say how much of an ownership stake he has in Remine or whether he will participate in the Series B round.

Read the term sheet:

Email Andrea V. Brambila.
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