The real estate funding revolution continued to accelerate with investors putting $2.5 billion into residential real estate in 2019, a 42 percent jump over 2018 investment. Approximately two-thirds of 2019 investment went to five iBuyer and iFunder companies: Offerpad ($565 million), Knock ($400 million), Opendoor ($300 million), Perch (rebranded as Orchard in January 2020, $220 million) and Flyhomes ($141 million). (IFunder companies are a twist on iBuyers; they provide quick financing for buyers and fast, all-cash offers to sellers but do not necessarily buy and hold properties themselves). In addition to the large amounts invested in iBuyers, some traditional and new brokerage models also saw investment. For example, Compass raised $370 million in a Series G round that included previous investors SoftBank Vision Fund and Glynn Capital Management as well as new investors. And REX, which offers lower commission rates and uses AI to target buyers directly without using MLSs, raised an $85 million Series C round to further its’ market and service expansion. On the real estate tech vendor front agent-matching and referral company, and budding iFunder, HomeLight raised a $109 million Series C round. 3D platform provider Matterport raised $48 million in a Series D round. And OJO Labs, maker of an AI-driven personal assistant for real estate agents and homebuyers, and a strategic partner of Realogy, raised $45 million in a Series C round. 2019 continued a multiyear trend in real estate technology funding with the bulk of funding dollars directed to companies raising Series C or later funding rounds. Late-stage funding is often associated with companies focused on scaling and maturing their businesses. This suggests a maturing investment environment for residential real estate. Download T3 Sixty’s expanded 2019 funding report here.
Edition: February 2020