Top Funded Home Equity Startups

The rapid growth of cloud and open source software have given rise cohort of tech unicorns. These unicorns have tackled and changed industries in finance, transportation, BI, real-estate, and others. Besides Airbnb, real-estate technology (proptech) companies are, due to the market’s younger age, still relatively low-key compared to their counterparts in more mature industries. With an increasing rate of venture dollars spilling into proptech, my call is that this is about to change.

Upwards of $16 billion in venture capital has flowed into real estate-related startups across the category in 2019. Let us look at who some these startups are and who are the VC investors putting their money into the global proptech market. In this entry, we will focus on home equity.

The market is definitely hot, but the addressable markets are enormous and adoption is still relatively low and accelerating. We believe that now is a good time to invest in early-stage proptech, provided it’s done prudently.

Zach Aarons, MetaProp

Home Equity

Proptechs operating in the homeownership space are mostly driven by business model innovation. These companies buy home equity with cash and share any gains or losses in the home value over time. Unlike a lender, home equity companies invest alongside homeowners, providing cash and participating in the proceeds at the time of a sale. Companies operating in this space either rent the home back to the homeowner (rent-to-own/leaseback) or participate as co-investor.

The following are some of the highest-funded proptech companies in the home equity market.

View of Tallinn. Source:


Hometap is a way for homeowners to buy property without taking a loan. The company buys up to 20% of the home for cash, sharing gains or losses in the property value for 10 years.

Their total disclosed equity funding is $12M (all from series A)from General Catalyst and American Family Ventures.


Their latest funding was series B for $43M from Andreessen Horowitz, GIC, Caffeinated Capital and Lennar.

The renter selects a home on the market which Divvy then purchases. The renter then builds equity in the home with every rent payment.

See alsoHow the global real estate market makes up more than half the value of all mainstream assets in the world.


Unison buys a portion of the home, whether directly from someone who already owns the home or by co-investing the downpayment. Unison then shares in the gains or losses in the value of the home.

Their total disclosed equity funding is $92.8M from F-Prime Capital and Citi Ventures.


EasyKnock buys 70% of the homes in cash and rents it to the homeowner for up to five years. After the period, the homeowner can either buy the home back or sell it. EasyKnock keeps the right to sells the home itself with a 1.5% commission, giving the homeowner back the remaining sale earnings.

Their total disclosed equity funding is $319.7M from Blumberg Capital and Montage Ventures.

I believe we are still in the early innings of proptech — maybe 3rd or 4th inning. I always like to make the comparison to fintech. Technically speaking, real estate is a larger asset class than financial services. — Ryan Freedman, Corigin Ventures


Ribbon offers homebuyers to upgrade the offer they have, to cash regardless of where they are in the mortgage process making the purchase more affordable and provide certainty of moving in on-time.

Their latest funding was series B for $30M + $300M Debt from Bain Capital Ventures, Greylock Partners, NFX, Nyca, Thomvest Ventures, and Goldman Sachs.


Figure offers an alternative to the HELOC loans (federally-regulated home equity line of credit), but also has launched a product that buys a home from an owner and then leases it back to them. Figure’s loans use a proprietary blockchain system named Provenance.

Their total disclosed equity funding is $1.17B from Ribbit Capital, DST Global, RPM Ventures and DCM Ventures.

I see a big opportunity for startups with a strong technology component to provide solutions for the mismatch between the way consumers want to live today and the aging housing supply that was built for a previous era with different needs and demographics.

Pete Flint, NFX

There are multiple others also operating in this space like Homeward, Flyhomes and Patch Homes.

While startups focusing on home equity approach proptech from the transaction perspective, there are multiple other parts of the real estate value chain that is in the process of being disrupted. Whether that is from the construction, maintenance, legal or from the property management side.

The amount of money spent in real estate is enormous, and the data and tools we use today are still based on insights from a decade ago. Homeownership is the low hanging fruit for investors in proptech, but it is helpful to keep in mind, that it is just the start of the life-cycle of owning a home. The younger generation, raised on the Internet, is used to, and demands getting help managing their daily life with online tools. So too will they expect more from the Internet when it comes to real estate management.

For us, at Moowle, these insights are invaluable and credit goes to TechCrunch and Business Insider as the source of some data.

The Revenue Models of WeWork

We Company has, over the years moved from lease length arbitrage to management fee collection to construction, and is now pivoting back to basics.

WeWork has always carried a risk with its long-term leases which could realize during economic slowdown when it would lose its short-term customers. The bubble didn’t have to burst for the company to implode. A self-inflicted wound has brought the company valuation down from $47 billion to everywhere between $5 billion to nothing.

These additional revenue streams were not meant to generate profits but to help brand the company favorably in the eyes of the investors.

Co-working, in essence, has two models. An Airbnb like concept, where the company is an intermediary platform brokering shorter-term workspace, and an operator model, in which the business controls the capital asset. Brands active in the former space include PivotDesk, Breather, LiquidSpace, Flexioffices. These, like Airbnb, and are self-policing and rely heavily on customer feedback.

Companies in the latter operate on the so-called ZipCar operator model, used in the co-working sector by WeWork, Workbar, Spaces, Central Working, Grind and others adapting to change like Regus. These businesses act as renters of space and facilities managers rather than intermediaries between users and operators.

Regardless of the model, co-working has three distinctly separate drivers. The first two colliding forces that grew its market share from 1% to 14% for example in London from 2000 to 2016 were the increasing demand from big businesses to be more flexible and the length and inflexibility of the traditional office lease. One result of this collision was Regus, a multinational corporation launched in 1989. Supplying flexible quantities of space on short leases across the world. Regus, like WeWork, expanded rapidly during a dotcom boom, but Regus became bankrupt in 2003 after the dotcom bubble burst and it lost its customers from the tech sector.

The Coworking timeline ● Jones Lang LaSalle, 2016

Regus was not established by or for the benefit of millennials. When we add the third driver of co-working, the millennials’ preference for the access economy, we provide the conditions for WeWork and many other co-working brands.

WeWork allowed its customers to license culture on a subscription basis.

Started in 2010, WeWork grew quickly from a New York co-working space into an international lessee company and a startup incubator. It made its money, though not profits, from lease length arbitrage — buying long leases, selling short leases and realizing the break-up value. In order for that to work, they had to sign into long-term lease agreements. Focused on growth over profits, it grew quickly into a unicorn backed by J.P. Morgan Chase, Goldman Sachs, SoftBank, and more than six other hefty investors.

Photo by Robert Bye on Unsplash

After noticing the likes of IBM and several other large companies booking entire floors in their existing locations, effectively carving out their own offices, WeWork, in 2017, added a new revenue model to its business. It allowed its customers to license culture on a subscription basis. You could no longer only purchase real estate, but an entire company culture needed to run a modern office. This included everything from fruit water and community managers, to corporate aligned interior design. It offered a full design and management of an office building including a management fee collection for branding, software, and staff trading services.

These additional revenue streams were not meant to generate profits but to help brand the company favorably in the eyes of the investors. Focusing on more intangible values like culture design made WeWork more than just a glorified property management firm. The fleeting esteem allowed WeWork to raise an additional $300 million from SoftBank the same year.

The next two years were spent on choreographing a move towards an IPO. The going public assumes increased valuation. Growth over profits mentality went on steroids and by the time the S1 was filed to SEC in August, WeWork was on the hook for $18 billion in future lease payments to building owners while having committed revenue of about $4 billion.

That and other things didn’t go unnoticed and the ambitious public offering resulted in aversive public regard. This together with the unusual business activities and over-valued investments brought down both the powerful CEO and the company valuation.

The following was written in a 2016 research done by the University of Oxford.

“Operators such as WeWork may continue to evolve as a management company — not a tenant, not a landlord but an operator like Marriott or Hilton. However, the probable emergence of a third model — the owner-operator — must also be considered. It would be surprising if a highly successful WeWork with a strong balance sheet did not in the longer-term de-risk its operations by acquiring the real estate it operates — in which case it would probably become a REIT.” – University of Oxford

As we know, this didn’t realize then, and instead, three years later, REITs are analyzing their own exposures to WeWorks ill-fated business model choices. Thankfully for many, the liabilities are minimal as out of the 2,800 office properties in the U.S. there are only 15 REIT-owned properties containing WeWork as a tenant which represents less than 0.2% of all REIT-owned office space in the US. Those who have leased out, most often have extensive safeguards and financial backstops to protect against WeWork leaving.

For a company in crisis mode, the top priority is cost-saving and restoring trust for investors and the public. This will lead to cutting jobs and getting out of secondary business activities. Laying off more than 20% of the 12 000 strong workforce and divesting from new ventures like Meetup and Wing. Getting out of construction, and with an 80% occupancy rate, mothballing some of the real estates is expected.

Almost too big to fail, WeWork is pivoting back to a pre-2017 company. The help of experienced executives, a new lifeline from investors and a sobering mentality change, might just be enough to turn it around into a stable and dare I say it, profitable company.

The Second Wave of PropTech

While PropTech 1.0 was mostly comprised of established companies going online, the second wave, like in many other sectors, is disrupting through the mechanisms and economics of startup creation. Both VC backed unicorns and bootstrapping underdogs are trying to win over parts of the huge real estate market. A growing amount of investments can be seen moving into the more than 2000 Startup strong market.

Read about the first PropTech wave here.

These startups all operated roughly in the commercial, residential or mortgage sectors. Because the global residential market is around six times the size of the commercial one, investments are mostly going to the former.


The second PropTech wave is driven by startups backed by VCs that innovate property and portfolio management, home services (i.e gig economy), rent and sales search, insurance, agent tools, mapping, IoT and office spaces (i.e co-working).

Most of the 2000+ startups can be divided equally between the 3 verticals. These are the Smart Real EstateReal Estate FinTech, and the Sharing Economy.

Let us take a closer look at these verticals, what they stand for, who are the biggest players and how an organization can align itself to make use of the value potential of each.

Smart Real Estate

Smart Real Estate vertical stands on the premise of the following expectations. Both users and investors expect that buildings will operate cost-efficiently and are highly functional at the same time. If operational costs are lower, then occupants will experience more competitive fees that result in better returns to investors.

It would be the perfect problem to solve for IoT if it wouldn’t be for the inherent flaws of the latter.

Continue on Smart Real Estate here.

Shared Economy

The sharing economy in Real Estate is galvanized by the slow merger of the second and third space. People don’t work in the office that much anymore. Sharing Economy, of course, is not only affecting the Real Estate but also the transportation and labor markets.

The low ownership rate this economic model is generating will benefit many operating in the rental market space.

Continue on Shared Economy here

Real Estate Fintech

The third vertical of PropTech is Real Estate Fintech. Startups in this vertical enable faster and more convenient trading of real estate assets helping to lower the illiquidity of the notoriously solid asset class.

The global real estate market makes up more than half the value of all mainstream assets in the world

Continue on Real Estate Fintech here

The expectations towards the second wave are to mitigate the limitations of the Real Estate asset class like depreciation, lease contracts, supply-side regulations, smoothing and so forth. Time will tell if it succeeds or will the third wave with its AI be needed to break through.

What is the Real Estate Fintech vertical?

The third vertical of PropTech is Real Estate Fintech. Startups in this vertical enable faster and more convenient trading of real estate assets helping to lower the illiquidity of the notoriously solid asset class.

Read about the first two verticals here.

Out of all the transparency these technologies will bring, the strongest impact will be on the turnover rate. Vertical market-networks are the next generation service marketplaces that will not only provide a platform for matching supply and demand but also industry-specific workflows for facilitating long term business collaboration.

The global real estate market makes up more than half the value of all mainstream assets in the world

In other words, these platforms will attempt to not only match but also keep the parties online for the entire lifecycle of a transaction (e.g property letting and management).

While the Shared Economy vertical is mostly driven by the recent changes in the economy and mindset of peoples, then Real Estate Fintech is driven by the relatively stable, massive size of the global real estate market.

The realization that today’s technological advances can massively reduce illiquidity of the real estate assets is galvanizing businesses to invest more in the Real Estate Fintech.

Let’s look at that in numbers.

The global real estate market makes up more than half the value of all mainstream assets in the world. From that, residential real estate is worth around $190tr.

From that $190tr, roughly 0.5% or $1tr is being traded annually from which the commissions and fees are around 5% or $50bn. From this, just a 10% increase in efficiency would already release a potential revenue of $5bn. These are strongly conservative numbers and we can expect the turnover to increase to around 5% making the efficiency gains produce more than $50bn.

A dominant platform reducing the inefficiencies of property trading might now easily compete with the top biggest global companies whose earned revenues range from $17bn for Facebook to $100bn for Amazon.

Looking at these numbers and the lack of players in the sector, it’s fair to believe that the sector will see additions to its current 25 Unicorns. PropTech is the next greenfield marketplace.

Real Estate Fintech is a large sector. Let’s break it down to six key categories and look at who are some of the players in each.

Research and information businesses

Companies in this category were formed during the first PropTech wave. These were information and analytical businesses that today are under pressure from new challengers. Businesses using modern technological solutions like machine learning while leveraging the growingly available massive sets of data. Some of these companies are Datscha, Kensei, and Geophy who all collect, aggregate and visualize real estate data converting it to actionable insights for its customers.

Residential sales and letting engines

This category is mostly made up of the late PropTech 1.0 players like Zillow, Rightmove, and Zoopla who are all aggregators of information. They all operate in the sales and rent space of a real estate.

As they mature, they are being challenged by the new-comers of PropTech’s second wave with the likes of HouseCanary and Purple Bricks. These companies make use of advances in machine learning and publicly available data.

For old and new alike, the trend here is towards developing smart algorithms and models that will allow valuing residential property in real-time. Examples of these are Zestimate from Zillow.

Crowdfunding and equity

Real Estate Crowdfunding is equity raising under the shared economy model. This model exists mainly due to the difficulties experienced when raising equity in the traditional way. These problems usually present themselves during the vetting and sales process as difficult time and quantity requirements.

In addition to making investing less time consuming and complex, crowdfunding opens investment possibilities up for larger audience potentially increasing the available capital.

Just as in other verticals, here too, the PropTech 2.0 newcomers are replacing the long-established information providers. They can do this by offering better workflow tools and analytics for investors by using technological advances in computing and data processing. Examples can be seen in iCapitalNetwork gradually replacing Indirex and Property Funds Research.

Some crowdfunding platforms are also working on making ownership possible for the underbanked by offering co-investment opportunities for those without adequate deposits. Platforms like The Unmortgage and Stride Up, do just that.

Debt and mortgage

Separate from equity raising platforms, debt crowdfunding and mortgage platforms are seeing increasing investments and revenues.

Mortgage Tech companies are aggregators which facilitate the mortgage application process. They do not lend or service the loan and are thus different from crowdfunding or lending companies.

Examples of companies in this space are Trussle in UK and Interhyp in Germany.

Digital mortgage companies, on the other hand, are online lenders which both facilitate the mortgage application process and service the loan. Within this category, Homegate in Switzerland and bijBouwe in the Netherlands come to mind.

Commercial property

Recognition that leasing and portfolio management is painful for owners has given rise to new PropTech businesses operating in the following two categories.

Revenue Analytics

Portfolio cash flow analysis is an important job but one that doesn’t scale without becoming overly complex for traditional data tools like Excel. Here too we see the players of PropTech 1.0 being challenged by the new and more tech-advanced companies.

An example of which is Reoptimizer. A commercial real estate optimization tool that attempts to ease lease management by providing lease workflows and documents management.

Leasing Process

These firms enable owners and managers of commercial real estate to monitor and tenants to spectate the letting process in real-time.

Leverton is another example of a tech firm creating efficiency in the leasing and portfolio management process.

With rivalry, there is coopetition. It’s here that we can see established, traditional companies partnering with more tech-advanced businesses.

Example of this is the collaboration between JLL and Leverton. The former is a global real estate financial services firm. Leverton with is experience in data science is powering the key administrative processes in its lease management.

Currently, transactions with leases required the lessor’s consent in an oldfashioned offline process. The efficient storage and management of leasing data will open up possibilities for much greater liquidity in the class.

iBuying — disposal and secondary market exchanges

The illiquidity of the real estate asset class has always been a barrier to first-time buyers. To lower these barriers and increase liquidity, online sales sites have moved into iBuying (i.e flipping homes) and by doing that, have created a secondary market platform for homes.

Companies like Opendoor, Nested, OfferPad and Knock provide liquidity as a middleman by buying homes and suggesting to sellers who are trying to liquidate quicker, that they can sell their homes more efficiently but for a service fee of around 6%.

Opendoor will buy the home, whereas Knock uses an underwriting model where it guarantees a price and will transact on the seller’s behalf. If the house does not sell in time, they will buy it.

Rezi takes long leases of residential property and rents out the space on shorter terms at a profit performing market arbitrage facilitated by the greater reach of a tech platform.

At the same time, the commercial market is moving to the opposite direction as we can see attempts made to unitize assets and to trade these units on platforms.

IPSX, the International Property Securities Exchange, is a new exchange for the trading of shares in single asset property companies. FCA approved, they launched the platform just early this year. The exchange offers investors direct access to the specific underlying property assets relating to their investment, as well as clarity over the revenues and associated costs as well as tax efficiencies typically conferred by REIT status.

Real Estate Fintech is perhaps the largest of the three verticals in the current PropTech wave and driven by the revolution in the broader FinTech sector.

Read more about the other two verticals at Smart Real Estate and Sharing Economy.

Next up we will look at the third wave of PropTech- the AI summer.

For us, at Moowle, these insights are invaluable and credit goes to the Oxford study on this subject matter. Check it out for more details.

5 Shared Economy Values in PropTech

The sharing economy in Real Estate is galvanized by the slow merger of the second and third space. People don’t work in the office that much anymore. Sharing Economy, of course, is not only affecting the Real Estate but also the transportation and labor markets.

Access to the Internet and the consequent communication tools, the loss of jobs and assets after the financial crisis of 2008, popularization of entrepreneurship and the fallout of political stability has shaped the minds of the Millenials which carries itself across all verticals. It helped to create some of the largest unicorns of the century (e.g Uber, Airbnb, and WeWork).

The low ownership rate this economic model is generating will benefit many operating in the rental market space.

For Millenials though, the use of sharing economy services often comes out of necessity, not preference. Surely when living in a large metropolitan, ride sharing can be more convenient than owning a car, but in most other cases, renting an asset over owning it is financially inferior. Many popular articles with sentences like “Millenials have reconsidered the need for ownership” try to convince us that their values are somehow more enlightened and less materialistic, while in reality just reflect the growth of the increasing wealth gap.

The growth of inequality can be also clearly seen in the counterintuitive relationship between high real estate prices and the massive availability and excess of living space. The low ownership rate this economic model is generating will benefit many operating in the rental market space.

The nature of the Shared Economy model offers the following 5 value propositions which any organization operating in the Shared Economy sector can align itself to.

  • Widely distributed and a diverse source of demand — people looking to rent
  • Widely distributed and a diverse source of supply — excess available space
  • Lack of effective mechanism for bringing demand and supply together.
  • Financial gains for both demandsupply as well as for the intermediary.
  • Scaleability.

Airbnb is a great example of a company that is well-aligned with all of these conditions. This has also allowed them to grow from 1M listings in 2014 to 6M today.

Similar alignment payoffs can be seen in many other cases where companies operate in the Shared Economy space. Since this economy has been meticulously designed to follow the above-mentioned model, the shared economy attributes are here to stay and anyone looking to start or turn around a business should consider aligning its value offerings to the above.

Continue reading The 3 Waves of PropTech — 2.0

Role of Smart Real Estate in PropTech

Smart Real Estate vertical stands on the premise of the following expectations. Both users and investors expect that buildings will operate cost-efficiently and are highly functional at the same time. If operational costs are lower, then occupants will experience more competitive fees that result in better returns to investors.

Until recently, the energy bill was the concern of the tenant and was not included in the original lease agreement. While sustainability and energy efficiency has been the concern of the public, it never really bothered the property owners.

That was until now. As we see utility bills and rent being bundled together and the owner charging an energy-inclusive rent, the need to deliver an energy-efficient building is becoming more relevant.

If with the lowering prices of green and off-the-grid energy systems, the owner can also generate power and cut out the utility company, the concern will move towards the energy usage of the tenant. This, in turn, will create a need for systems where the benefits of energy-savings pass directly to the market participants. This requires intelligent monitoring of energy use through control and monitoring systems and the efficient movement of data between the user of the building and the supplier of space and energy, or in other words, smart building tech.

It would be the perfect problem to solve for IoT if it wouldn’t be for the inherent flaws of the latter. Internet of Things devices require expensive hardware and they need to be connected to the Internet.

Putting a smartphone grade device into every home appliance is inherently expensive and void of standards. Connection to the Internet raises many privacy questions and is prone to be misused.

Instead, companies focusing on distributed systems that are integrated at the manufacturing level, and require only an assembly during home building and not a separate “smart project” will prevail. These systems will work independently of the Internet as a network of low power, distributed nodes that have low hardware requirements and run complex software solutions that solve for the security and reliability of the protocol.

Next, the 3rd vertical of PropTech 2.0 the Shared Economy

For us a Moowle, these insights are invaluable and a lot of credit is due to the Oxford study on this subject matter. Check it out if you want to take a deep dive into the details.

The First Wave of PropTech

Real Estate is the largest asset class and one of the last to adopt technological change. Despite its limits, the size and lack of adoption to tech present a great opportunity for entrepreneurs.

The potential of tech in the Real Estate market started to realize first in the 1980s with the invent of the Personal Computer. That was the start of the first PropTech wave. Today we are experiencing the second wave and the third can be seen just behind the corner.

Let us examine how these waves are defined, what can we learn from them and what they can tell us about the future of PropTech.

What is PropTech

PropTech as an all-encompassing term used to define a specific sector can lead to misunderstandings. It embodies in itself FinTech (which is just another umbrella term), lending, payments, wealth management, money transactions, crowdfunding, property, and ConTech (construction engineering & management), and so forth. To have a ubiquitous language throughout this blog, we follow the classification done by Oxford in a recent study on PropTech.

This article borrows heavily from the study and can be considered a summary while attempting to add takeaways for the reader.

As defined in the Study, PropTech can be divided into three verticals and horizontals where each organization operates somewhere in and between these cells.

Each vertical describes technology-based platforms which facilitate certain operations with a specific product or service. Smart Real Estate facilitates the operation and management of real estate asset. The Shared Economy facilitate the use of real estate assets while the Real Estate FinTech describes technology-based platforms which facilitate the trading of real estate asset ownership.

Many in the PropTech sector, are operating either in all of the verticals at the same time or have strong touchpoints across.

As can be seen, FinTech consolidates many of the PropTech verticals. This is also why the financial technology industry with its online payments, crowdfunding, equity, debt and exchange platforms provided the foundation for the PropTech 2.0 revolution. Before dissecting the second wave, lets first see where it all started.

Photo by Rod Long on Unsplash

The First Wave — invent of PCs

PropTech 1.0 lasted for 20 years. Like many other technological revolutions, it started with the invent of Personal Computers in the ’80s. When PCs and mainframes made computing power more available, different property market analytics companies were established. More data was produced than ever before and the growing volume of internet traffic throughout the 90s only fed the analytics capabilities. These innovations mostly profited existing Real Estate companies who managed to improve their economics through better decision making.

These twenty years also saw the launch of Autodesk in 1982 which today, plays a key role in the ConTech sector. Developments in e-Commerce gave way to FinTech that later started the second wave and email was mainstreamed for the mass data facilitation online.

PropTech 1.0 ended with the dot-com burst in 2000. At the same time, big estate agencies moved their residential markets online as we saw the launch of multiple Internet property portals throughout the decade from 2000 to 2010. Examples are Rightmove in UK and Zillow in the US.

Recent advances in information technology have made the development of complex transactional environments faster and more accessible. The mass distribution of mobile internet and cheap smartphones has put a potential management dashboard into the hands of almost every person in the world.

The advances in computing, FinTech revolution, and the startup economy, in general, have all contributed to the second wave of PropTech.

In the second part, we will understand how the three verticals of PropTech play into the current wave and how Your organization can align itself to make the most out the ongoing transition to PropTech 3.0.