On Thursday, June 16, 2022, HomeLight, a property technology (proptech) real estate referral firm headquartered in Scottsdale, Arizona, made two major announcements. It had secured $55 million in debt financing and another $60 million in capital. In an undisclosed all-stock transaction, it also acquired the iLender housing and mortgage finance technology (fintech) firm Accept Inc.
HomeLight Resists Current Trends
Although the housing market is hot at the moment, finance experts agree that it's starting to cool because of the impact of the pandemic, inflation, world events, and national and international economic instability. Most companies aren't making these types of growth moves. Instead, they're downsizing in preparation for more significant economic problems projected for 2023. For example, many publicly traded real estate companies, such as Compass and Redfin, have laid off hundreds of workers.
Why Has HomeLight Taken This Approach?
HomeLight's recent fundraising and proptech fintech merger remain in line with its September 2021 Series D funding round announcement. The fundraising is an extension of that round contributed by pre-existing lead investor Oren Zeev of Zeev Ventures. Per HomeLight, the company has handled more than $1 billion in real estate transactions a year since its inception in 2012. As noted by HomeLight in an October 2021 press release, HomeLight experienced 700% growth since the January 2020 launch of its Trade-In and Cash Offer products.
According to HomeLight's CEO and founder, Drew Uher, HomeLight's business is "stronger than ever." HomeLight can fuel operations, meet agent demand, expand, and prepare for whatever comes next with the economy. The combination of the fundraising and proptech fintech merger allows HomeLight to handle uncertain times offensively and defensively. Uher acknowledged the market instability. He told the media that he was closely watching it. He's prioritizing methods to strengthen various areas and has slowed HomeLight's hiring through the end of 2022 as a preventative measure.
How Does a Proptech Fintech Merger Benefit HomeLight?
By the end of September, HomeLight had raised a total of $363 million. Per Crunchbase, it has raised more than $742 million in over 15 rounds. Accept Inc was its third acquisition after Disclosures.io in August 2020 and Eave in July 2019. HomeLight can expect billions in combined referred real estate transactions yearly with the Accept Inc merger. The 2022 Q1 numbers already bypassed a combined $3 billion in referred transactions. Its current valuation is $1.7 billion.
Uher noted that HomeLight's primary goal was to reduce friction between agents and clients. HomeLight initially moved from using AI and digital innovation technologies to provide referrals between agents and real estate investors to offering title, escrow, and mortgage lending services. After volatility set in with the market in recent years, HomeLight expanded to digital tools that would help agents outcompete other real estate companies in their local markets. A fintech firm like Accept Inc gives HomeLight's agents a financially competitive edge.
Accept Inc, an iLender, provides its customers who qualify for a mortgage a way to submit all-cash offers when they don't have the cash to do so. Accept Inc fronts cash to a mortgage-approved homebuyer to take advantage of an upfront cash payment discount or make an upfront cash payment negotiation when multiple buyers show interest. HomeLight's leadership considers the Accept Inc proptech fintech merger a "strategic move" that makes it possible for their "top agents" to be even more competitive by taking advantage of Accept Inc's contingency-free cash transactions.