AUSTIN, Texas--(BUSINESS WIRE)--Homeward today announced it has secured $25M in initial funding, including $4M of equity funding led by LiveOak Venture Partners and $21M of debt funding from Genesis Capital and Keystone Bank. Founding team members of Opcity, ApartmentList, and a few other real estate tech startups also participated in the round.
The funding will power the expansion of Homeward’s support teams and acquisition initiatives, as well as to improve its web and mobile customer experience to scale its initial product offering, The Homeward Way. The company’s innovative business model enables customers to make all-cash offers to secure their next home prior to selling their existing home.
“The current process of home buying is backwards,” said Tim Heyl, founder and CEO at Homeward. “Buyers have to sell their existing home and then rush to find a new one. We remove this uncertainty by letting buyers use our cash to secure their next home first. Then they can take their time and sell their existing home for its full market value.”
Redesigning the home buying experience
Tim Heyl has been in the real estate industry for over 10 years and founded the Heyl Group in 2009, which has grown to become one of the top 25 teams in the US. As a real estate professional, Heyl kept encountering a critical challenge in the process — buyers couldn’t make an offer on the home they wanted until they sold their existing home, but they didn’t want to list without knowing where they were going next.
In 2018, Tim founded Homeward to redesign the home buying process with the Homeward Way model, capturing a growing market share in Texas, Georgia and Colorado. The Homeward Way gives homebuyers credit for their home equity up front, and lets them make an all-cash offer to secure their next home using the company’s funds. Homeward customers also receive a floor price guarantee on their existing home in case they’re unable to sell it for its full market value.
Buyers that use Homeward’s all-cash offer get an average discount of 2-5% on their next home and are twice as likely to beat buyers who make mortgage-backed offers. Homeward customers can also stay in their current home while they make improvements to their new property. They only move once and can control the timing of their move.
Homeward customers don’t have to sell their existing homes at a discount to iBuyers, which typically offer below market pricing and charge fees greater than those of traditional real estate agents. The service charge for Homeward is transparent, at a fixed 1.90% of the purchase price, compared to iBuyers who charge up to 9.0% of the home sale price. iBuyers also take a portion of the real-estate agent’s commission, and in some cases force the home buyer to work with them exclusively.
“We partner with exceptional entrepreneurs who are looking to transform large established industries. We recognized early on after meeting with Tim, given his incredible domain expertise and accomplishments and our experience as the first institutional investor in Opcity and Ojo Labs, that Homeward has real potential to disrupt the real estate market by empowering the consumer,” said Krishna Srinivasan, Founding Partner at LiveOak Venture Partners. “Our team is excited to invest and support the Homeward team as they reshape the broken legacy process of buying and selling homes.”
The Homeward Way:
- Get approved: Submit an online application and Homeward will calculate your home equity and provide you with an approval in minutes.
- Shop for your next home: Work with your agent to find and purchase your ideal next home without having to list and sell your current home first.
- Make an all-cash offer with Homeward’s funds: Secure your next home by making an all-cash offer with Homeward's funds.
- Lease your new home from Homeward: Lease your new home back from Homeward for up to six months.
- List your existing home: List your home for sale whenever you’re ready. If it doesn’t sell, Homeward will buy it from you at a pre-agreed, fair market price.
- Get a mortgage and close on your new home: Once your old home sells, you’ll get a mortgage and buy your new home back from Homeward at the original purchase price.
A partner for real-estate agents
43% of home buyers have an existing home to sell before they buy their next one. This hurdle can cause homeowners to delay their move indefinitely, which hurts customers and their agents.
To solve this problem, Homeward works with agents to get their clients approved to make a Homeward all-cash offer. Agents go directly to the company’s site to register their clients.
“Without Homeward, my clients would still be in their old house.” said Matt McKnight, a real-estate broker in Austin, Texas. “The right home in the right neighborhood popped up well before they had considered listing. Homeward’s all-cash offer secured the house and gave us the time we needed to list their existing home without feeling rushed.”
Homeward lets customers relax, and buy before they sell. Customers buy the home they want using an all-cash offer, and then sell their current property at full market value. Founded in 2018 and backed by LiveOak Venture Partners, Homeward is expanding rapidly in Texas, Georgia and Colorado. For more information, please visit Homeward.com.
About LiveOak Venture Partners
LiveOak Venture Partners is a venture capital fund based in Austin, Texas, founded by Ben Scott, Krishna Srinivasan and Venu Shamapant. With 20 years of successful venture investing in Texas, the founders of LiveOak have helped create nearly $2 billion of enterprise value. While almost all of LiveOak's investments begin in the early stages, LiveOak is a full life cycle investor focused on technology and technology-enabled service companies based in Texas. LiveOak Venture Partners is a lead investor in exciting high-growth Texas-based companies such as CS Disco, Digital Pharmacist, OJO Labs and Opcity.