End-to-end real estate services platform Fathom Holdings Inc. has raised nearly $33 million through a public stock offering that it will use primarily to acquire smaller real estate brokerages in new markets.

Fathom integrates residential brokerage, mortgage, title, insurance and software-as-a-service (SaaS) offerings to brokerages and real estate agents, through brands including Fathom Realty, intelliAgent and Verus Title.

Since going public in a July 2020 initial public offering, Fathom has been on an acquisition tear. Last November, Fathom completed its acquisition of Verus Title, which provides title insurance services in 19 states, with plans for a full U.S. rollout.

Fathom then snapped up home search and CRM company Naberly Solutions in February, followed by market data and technology platform LiveBy. Fathom’s acquisition of E4:9 Holdings added Encompass Lending Group, Dagley Insurance Agency, and Real Results to the company’s portfolio of brands.

In June 2021 Fathom completed the acquisition of the real estate brokerage business of Epic Realty LLC, a Meridian, Idaho-based regional brokerage with approximately 350 agents.

With Monday’s closing of a sale of 1.75 million shares of common stock at $25 a share, Fathom is ready to resume its acquisitions, Fathom CEO Josh Harley said in a statement.

Josh Harley

Josh Harley

“Our primary objective for this raise is to use the funds, in part, to further accelerate the company’s growth through acquisition of smaller real estate brokerages that we expect to be immediately accretive to our business,” Harley said.

Fathom Realty utilizes a fee-based model where agents pay a $500 annual fee, plus a $450 transaction fee on each of their first 12 transactions in a year. After hitting that $5,400 annual cap, agents pay a fee of $99 per transaction for the rest of the year.

After expanding real estate brokerage operations into Minnesota and New Mexico, Fathom Realty now operates in 34 states and the District of Columbia.

“We are focused on acquisition targets that are in new or smaller geographic markets in order to achieve scale quickly, enhance revenue per transaction and launch mortgage and title faster than would otherwise be feasible,” Harley said.

Harley said Fathom may also use some of the $32.7 million in net proceeds from the offering for sales and marketing initiatives, investments in technology, working capital and for general corporate purposes.

With the close of the offering, there are now 16,196,207 shares of Fathom, which trades on the Nasdaq Capital Market under the symbol “FTHM.” Shares in Fathom closed Monday at $24.28, below the $25 offering price. Over the last year, the company’s shares have traded for as little as $20.30 and as much as $56.81.

The share offering was made under the terms of a shelf registration process that allows Fathom to offer up to $100 million in common stock, preferred stock, or debt securities over time. Fathom granted the underwriters of the offering a 45-day option to purchase up to 262,500 additional shares at the same public offering price.

In its most recent quarterly report to investors, Fathom reported a $3.4 million net loss, with revenue up 81 percent to $101 million, and real estate transactions up 42 percent to 11,498.

“Since our IPO in July 2020, we believe Fathom has performed exceptionally well and has continuously exceeded top line expectations,” Harley said.

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