OJO Labs is set to acquire the Chicago-based fintech startup Digs, a move that will help the Austin-based real estate technology company move closer to its goal of serving consumers through the entirety of their homeownership journey. The terms of the acquisition were not immediately disclosed.
“We’re assembling an end-to-end platform so that we can really stare at every consumer that we meet and then provide a seamless path to accomplishing whatever their goals are around homeownership,” John Berkowitz, the CEO and co-founder of OJO Labs, told Inman.
“Whether that’s [helping them] find the perfect home on their own time, find the most affordable home, save the most money on the home, get there as fast as possible, find the right neighborhood. Everybody comes to homeownership with a unique, very personal set of goals,” Berkowitz said. “Our mission is to serve every single one of them.”
Digs is an FDIC-insured fintech platform that helps consumers set and track savings goals, as well as learn about the homebuying process and achieve guidance throughout the entire journey. Consumers can connect the platform to their bank account to provide real-time financial guidance and insight. With the acquisition, Digs will be integrated into the OJO Labs platform.
The company’s acquisition of real estate portal Movoto earlier this year gave OJO — which was originally launched as an AI-powered personal assistant to help homeowners in their search — a stronger foothold in the search process of buying a home. Acquiring Digs, which is a personal finance startup, gets OJO in front of the consumer before the home search even starts.
Berkowitz believes the real estate industry doesn’t currently serve consumers that high up the funnel, especially first-time homebuyers and individuals who don’t have a family history of homeownership.
There are currently two large holes in the industry for serving consumers, according to Berkowitz, the first of which is simply that they don’t know where to start. Consumers often don’t know how much buying a home really costs or how much they need for a downpayment. Digs gives them those tools, Berkowitz said.
“The industry today just kind of neglects you and spits you out if that’s how you come in,” Berkowitz said. “If you fill out a form on a portal and talk to a real estate agent or a loan officer and say, ‘I don’t know where to begin, I don’t know how much money I need,’ they basically neglect you and homeownership is out of reach.”
Once you finally do purchase a home, everyone disappears and you have an asset worth a ton of money that’s not easy to manage and no tools to help you manage that asset, Berkowitz explained.
“We’re not going to let a single consumer fall through the cracks,” Berkowitz said. That is the goal of OJO — to really eliminate the barriers that stand in the way of a successful home journey.”
“I think you have this perfect synergy between Digs and OJO because they have been focused very thoughtfully on the same pragmatic, resourceful way that OJO approaches problems in these two areas that we’ve always known our consumers needed help with, but we haven’t made progress on yet.”
Digs was founded in Chicago in 2018 and boasts a three-person team, led by Pat McLoughlin, its co-founder and CEO. He founded the platform because he noticed the real estate industry was so “transactionally focused,” he told Inman.
“That comes due to the fact that the home is the biggest transaction of someone’s life and there’s so much money tied to it from different providers,” McLoughlin said. “But the reality is, it’s not just the biggest transaction, it’s the biggest asset, it’s the biggest debt and the biggest expenditure as well.”
“We focused outside the transaction for the last year and a half, knowing that there was value there,” McLoughlin added. “When we met OJO, they had all the pieces that allowed us to connect what we had been working on to the transaction.”
It’s been a busy year for OJO Labs, which acquired real estate search portal Movoto fresh off the heels of a $62.5 million debt and equity fundraising round in June.
Last month, the company announced the launch of an exclusive referral network where it plans to work with the top real estate agents in the country.
The company also partnered with real estate holding company giant (and OJO Labs investor) Realogy to build the company’s customer relationship management tool and consumer-facing websites, as well as a lead conversion tool.