New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here
The real estate software company zavvie announced a new $3.65 million funding round led by existing investors Second Century Ventures on Wednesday as the company prepares for changing homebuyer preferences in 2023.
The new funding includes $1.5 million in cash and $2.15 million in convertibles. The company also announced that Second Century Ventures Managing Partner Tyler Thompson will join zavvie’s board of directors.
The software company, which is known for offer comparison tools, is betting on consumer preference for alternative homebuying solutions to power a strong 2023. Executives predict a particularly strong year for power buyers, as high mortgage rates drive first-time buyers to consider solutions, such as cash offers.
“We believe 2023 will be a breakout year for Power Buying because cash offers will particularly help first-time buyers,” Lane Hornung, zavvie CEO and co-founder, said in an announcement.
Hornung also predicted growth in the presale renovation and homeownership accelerator sectors.
“Also poised for explosive growth are two more categories: Listing Concierge or presale renovations, which help consumers sell their homes faster and at a higher sales price, and Homeownership Accelerators. Most renters still want to buy a home, and with a Homeownership Accelerator program, they can rent their starter home today and own it tomorrow,” Hornung said.
The company already saw this shift in homebuyer and seller behavior begin in 2022. Zavvie increased its total of brokerage-assisted transactions by more than 400 percent compared to its 2021 transactions, tripling its revenue year over year despite the market slowdown.
“Consumers are driving the real estate industry to change rapidly,” industry analyst Mike Delprete said in a statement provided by zavvie. “New buying and selling solutions became more commonplace than ever in 2022, and smart brokerages know that to compete today — and tomorrow — they must offer consumers all the options while keeping their agents at the center of the transaction for any solution a consumer chooses.”
The company expanded its presence significantly in 2022. Its national footprint grew to nearly 50 states and the number of agents using its platforms grew to nearly 75,000.
“More consumers are embracing a better way to buy and sell a home, and that’s why our best brokerage partners are increasing their business exponentially,” Hornung said.