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Real estate technology platform HomeLight has raised $115 million in new funding and reached an agreement to acquire cash offer provider Accept.inc — a deal it says will make the combined companies the largest “agent-focused” cash offer program in the U.S.
The new funding includes $60 million of Series D equity at a $1.7 billion valuation, plus $55 million of debt financing to fund operations, bringing HomeLight’s total funding to $645 million to date.
Scottsdale, Arizona-based HomeLight, which matches consumers with real estate agents and helps facilitate and finance home sales, launched its own cash offer products for first-time and repeat homebuyers more than two years ago.
The all-stock purchase of Accept.inc gives HomeLight a broader set of cash offer products and deeper market penetration, said HomeLight founder and CEO Drew Uher.
“We believe that in five plus years, cash offers are going to be the standard in the marketplace, and that’s the direction the entire industry is going,” Uher told Inman. “This is our move to kind of double down on that.”
HomeLight’s existing cash offer program, which is available in Arizona, California, Colorado, Florida, and Texas, allows buyers to make contingency-free offers, with HomeLight stepping in to buy homes and resell them to clients if necessary. HomeLight also provides the permanent financing, through HomeLight Home Loans.
Accept.inc recently adopted a different business model, in which it provides bridge financing to homebuyers to allow them to make cash offers, meaning homes only have to change hands once.
“The problem [with buying homes on behalf of clients] is that there’s some areas of the country where two transactions gets to be very expensive because of transfer taxes,” Uher said. Although HomeLight was working on its own bridge loan product, “We’re now able to piggyback off the work that [Accept.inc] did,” to offer both types of cash offers.
Regardless of whether homebuyers use a bridge loan, or make a cash-backed offer with HomeLight stepping in to make the purchase if their permanent financing is delayed, they’ll be able to work with any agent who’s willing to get certified to work with HomeLight and pay its referral fee.
“There’s some Power Buyers in the space that have structured themselves as a brokerage, and they’ve gone directly to the consumer saying, ‘Use our brokerage and will give you these tools,’ ” Uher said. “We’re empowering agents to turn their clients into cash buyers, and Accept also has a similar product.”
Launched in 2012, HomeLight got into the mortgage business with the 2019 acquisition of digital mortgage lender Eave, and built out its agent offerings the following year by acquiring Disclosures.io, a provider of listing management tools.
“We view ourselves first and foremost as a software platform that top agents can use to compete and win in a tech-enabled world,” Uher said. “We started with our referral product to help agents acquire new business. We ran that for many years and then we’ve layered in all these other products.”
Denver-based Accept.inc recently launched a pilot program with one of the nation’s biggest wholesale lender, Homepoint, in six states — California, Colorado, Minnesota, Oregon, Texas and Washington.
Uher said that HomeLight is “excited to continue” Accept.inc’s partnership with Homepoint, noting that many of the mortgage brokers who work with Homepoint are already connected to real estate agents who use HomeLight.
With this acquisition, HomeLight claims it will be the largest agent-focused cash offer program in the country, with both companies having closed a combined $3 billion in referred transaction volume during the first quarter of 2022.
The majority of the Accept.inc team is expected to take on new roles within HomeLight.
“We competed with them pretty vigorously in the state of Colorado, and we were really impressed by their model and by the business that they built there, and that’s kind of what kicked off the conversations with them,” Uher said.
“We founded Accept.inc to put a cash offer on every home and level the homebuying playing field for all,” said Accept co-founder and CEO Adam Pollack, in a statement. “We’re incredibly proud of the progress we’ve made and are excited to join HomeLight to continue our mission, while leveraging the incredible HomeLight platform and agent community to expand our breadth and products to top agents nationwide.”
Although terms of the deal were not disclosed, the fact that it was an all-stock transaction “allows us to use the proceeds of the fundraise to fuel growth for the combined company,” Uher said.
The latest funding round was led by an existing investor, Oren Zeev, founding partner at Zeev Ventures. Uher said Zeev has an “inside lens” into the company, that his backing is “a reflection of the strength of our businesss and the growth that we’ve managed to achieve.”
“I’ve always believed in HomeLight’s mission to make buying and selling homes more simple, certain, and satisfying by giving agents the solutions they need to win,” Zeev said in a statement. “HomeLight not only continues to deliver on that mission, but also outperform expectations. I’m proud to support them as they build the future of real estate, today.”