Homeward, a real estate technology startup founded by a Keller Williams team leader, raised $20 million in equity funding and $85 million in debt, the company revealed Thursday. Its founder Tim Heyl told Inman the money will go towards servicing more clients and keeping agent partnerships.
“The funding is going to allow us, primarily, to purchase more homes and continue to expand our offering to our customers,” Heyl said.
Through Homeward, a homeowner submits an online application and Homeward calculates equity and provides the homeowner with an approval in minutes using both a real estate expert and an automated valuation model.
The homeowner then uses those funds to make an all-cash offer on a home they find working with a real estate agent, without having to list their current home. Homeward technically initially buys the home and leases it back to the homeowner, while the agent works on selling the old home.
Once the home sells, the consumer can then get a mortgage and buy their home from Homeward at the original purchase price. If the home doesn’t sell, Homeward buys it from the homeowner at a pre-agreed upon price.
Homeward charges a 2.25 percent fee on the home that the consumer is purchasing, but Heyl said more than that fee is usually covered by the savings associated with having an all-cash offer.
Heyl, who built a highly productive real estate team with Keller Williams, also wants to use the money to deepen the partnerships the company has with agents. Most tech companies, according to Heyl, come from outside the industry.
“In our space, I’ve noticed many of them, have tried to cut the agent out,” Heyl said. “We’re taking a very different approach.”
“For us, this is about putting the agent back at the center of the real estate transaction innovation,” Heyl added. “It’s something that’s very close to home for me and a mission I’m really excited about personally.”
That Homeward was able to close a finding round during a global pandemic — the round technically closed about two weeks ago — is a testament to how well the company has been doing and how well the model can thrive in an era of social distancing, according to Heyl.
“Our customers are able to buy their next home, move into it, move out of their old home and that way they don’t have to be there for home showings at all,” Heyl said.
“Every single homeward customer is essentially able to avoid people coming in their house while they’re living there,” Heyl added. “It’s certainly a great solution on the safety side.
Homeward is currently live in George, Colorado and Texas, with no immediate plans to expand. Heyl told Inman he wants to hit a certain critical mass before taking the model nationwide.
The debt funding round included already existing players, but the equity round was led by Adams Street Partners, with participation from Javelin Venture Partners, which is led by Jed Katz, the founder of Move, which was acquired by News Corp.