Knock, a fintech company that lets homeowners buy before they sell, has hired Goldman Sachs to help prepare it for a public offering.
The news was first reported by Bloomberg, and shared with Inman via email.
Knock CEO Sean Black confirmed to Bloomberg the company’s plans of hiring Goldman for the purpose of going public.
According to Bloomberg, Knock is considering a public offering round with goals of between $400 and $500 million at a $2 billion valuation, merging with a SPAC (special purpose acquisition company) or executing a direct listing.
Black was part of the leadership group that took Trulia public. Trulia is now owned by Zillow.
In a phone call with Inman, Black said that there is a perfect alignment of market factors empowering a “20-year overnight revolution” in real estate.
“Covid forced those in the transaction who had no incentive of putting what they do online, specifically title, and escrow and notary, and the mortgage companies that required all those things,” Black said. “In that same moment, everyone decided they could live where ever they wanted to not where they were, and mortgage rates were at an all-time low. It’s such a great time to be in real estate technology, we’re at the final stage of the transaction going online after so much resistance.”
Knock’s value is based on its Home Swap program, a lending product that helps sellers enter the market without the burden of having to sell their existing home in order to execute an offer on a new house.
Knock also provides up to $250,000 in interest-free bridge funding to cover market preparation and repairs, a down payment advance and the seller’s mortgage while their home is on the market.
Several other real estate industry players have or are planning to enter the public trading space of late, including Compass, Opendoor and Offerpad.
Black believes his company is playing a crucial role in the flattening of the real estate deal, making it easier to buy and sell.
“In 2005 when we founded Trulia, we saw 50 million people searching on the top three sites with 5 million homes bought and sold, but now we see 300 million searching and only six million homes bought and sold,” Black told Inman. “So what were seeing come true is that if you increase the certainty and lower the expense and stress, and increase the convenience, more people will transact. Clearly the demand is there.”
The company first launched Home Swap last summer in Atlanta, Dallas-Fort Worth and Phoenix, and has rapidly expanded. In February, Home Swap moved into Los Angeles, and has since expanded to cover the majority of Southern California. And just this month, it launched in Minnesota’s Twin Cities and Nashville, Tennessee, making it available in 27 markets nationwide.
Knock grows its services by partnering with regional brokerages, training agents and assisting them in carrying out Home Swaps. The company works with about 76,000 real estate agents from over 150 brokerages across all of its markets. Black said Knock is in track to be in 45 markets by the end of 2021 and is hiring 50 people per month.
The company’s IPO will be this year, according to Black.
“We’ve been working on this for a while, it’s something that takes a long to get ready for, and it’s something will do sooner than later this year.”
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.