In March, PIUS announced it had secured $10 million in funding for REX, bringing REX’s total funding to $141 million, according to PitchBook data. PIUS is an insurance agency that insures loans from institutional investors to high-growth tech companies based on the tech firm’s intellectual property and other assets, according to the agency. The $10 million is a private placement bond underwritten by PIUS, the agency added.
In emails to Inman, PIUS declined to say who had loaned REX the money, but stressed that PIUS is neither a lender nor an investor.
“Rather, PIUS provides growing technology companies with non-dilutive debt by utilizing their intellectual property as collateral,” Joe Agiato, PIUS’s CEO, told Inman via email.
“PIUS performs an in-depth assessment of a company’s technology and IP portfolio, and based on this, PIUS insures the value of the loan to provide greater amounts of capital at lower rates.”
Agiato said REX “is still operating, albeit on a smaller scale. PIUS remains confident in REX’s technology, which is the basis of our financial relationship.”
Agiato declined to comment further and would not say whether the $10 million transaction had closed or whether REX had chosen to exercise the deal’s accordion feature, which would have allowed REX to increase its line of credit with its lender to $45 million.
At the time PIUS announced the funding, the company praised REX as “the national leader in real estate reform, with the goal of eliminating fees, growing the U.S. real estate market, and saving Americans billions of dollars” annually.
“REX Homes has built out an incredible suite of tech products and services, with its consumer-first model poised to disrupt the real estate market, using AI to learn quickly how to best serve its customers,” Agiato said in a statement in March.
“Through its tech tools and a fully-integrated platform, REX is bringing a completely new real estate experience to today’s consumers, and PIUS is excited to support REX in furthering that mission.”
At the same time, REX CEO Jack Ryan stated that the funding would “support REX’s continued business growth and market expansion, including both our technology platform and home buyer services, as we uphold our mission to deliver a direct-to-consumer real estate solution for individuals across the country.”
That solution no longer appears to include brokerage. REX reportedly cut loose all of its agents a week ago. A former REX agent in Southern California — who asked not to be named to avoid professional repercussions — told Inman that REX, after letting go staffers in other departments earlier in the week, had let all of its agents go through a companywide internal messaging system on Thursday.
“We were informed as a group … that REX was no longer going to be doing real estate transactions,” he said.
“We didn’t see it coming,” he added, of the brokerage’s downfall. “It all fell apart in one week.”
He had two pending listing contracts, and although agents were told they could take their contracts with them, he ended up canceling them because he didn’t know where he would end up. He thinks he’ll be able to get them back now that he landed at eXp Realty over the weekend.
He said he had worked at REX for about two years, had enjoyed his time there, and the company had treated him well. He also felt the company’s business model, which offers lower listing fees to sellers and rebates to buyers, was a good fit for him.
“I like the concept,” he said. “I thought they were more worried about giving the customer more control over the transaction and putting them first over the commission.”
He also liked that he could offer buyers and sellers “one-stop shopping” because REX had in-house ancillary services such as mortgages and moving services.
“Being able to help them from A to Z is what made REX different,” he said.
He said that he sometimes got pushback from a handful of agents about REX’s business model, complaining that he wasn’t charging enough. But he had no issues with most agents, he said, especially those “worried about helping the customer.”
Thus far, the only endeavor REX has stated definitely it would continue is its lawsuit against the National Association of Realtors and Zillow. Last week, REX hired famed lawyer David Boies to represent the company in court.
REX General Counsel Michael Toth did not respond to requests for comment.