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Point closes on $115M to give homeowners a way to cash out on equity in their homes –

Historically, homeowners can just hit their home equity by taking out a home equity loan or repurchase. But a new type of startup has emerged in recent years to give homeowners more options in which they can deposit cash into their homes to convert a portion of the future value of their home.

One such startup, Palo Alto-based Point out, announced today that it has raised $ 115 million in Series C funding following a year-on-year increase. The company declined to disclose its value.

Interestingly, the startup was founded by three people including Alex Rampel, which today is the general partner of Andreessen Horowitz (a16z) and also founded now Buy, paid later Giant Affirm. He was joined by Eddie Lim and Eoin Matthews to launch Point 2015 before joining a16z. Rampell is on the board of the company, but not in the day-to-day running of the company.

So, what exactly does Point do? In an interview with TechCrunch, General Manager Lim described the startup as a marketplace for real estate investors and institutional investors. The company’s popular product, Home Equity Investment, is designed to allow homeowners to receive cash in exchange for a percentage of their future home value. Point said last year, received more than $ 1 billion in new capital pledges from real estate investors and mortgages (MBS).

The way it works is for Point to first assess the applicant’s finances and provide a temporary grant. Point out and then rate the property – usually with a home valuation – and update the final proposal. Once all closing conditions are met, Point said it will invest within four business days. On average, Bartu’s Investment Equity Investment (HEI) measure is 15-20% of the value of a home.

Its average investment is around $ 100,000. The average house value in their market is about $ 700,000, according to Lim. Investors typically invest about 15-20% of their home value. So if a house is worth $ 1 million, they will invest $ 150,000 or $ 200,000.

Homeowners, Lim said, use the cash to do various things – such as repairing a home, starting a small business, investing in a child’s education or saving for retirement.

“We have homes valued at $ 250,000 in the market as well as multi-million dollar homes, and everything in between,” Lim said. “It can be a very difficult way to get cash.”

“The landlord does not have to pay us back 30 years,” Lim told TechCrunch. “Of course, most people have some kind of event or sell their home, or repurchase, before 30 years.”

Point out

Copyright: Point out(Opens in new window)

Executive he compared the system to the investor who invested and supported the startup.

“It simply came to our notice then [an investor] making a VC investment in the home, “said Lim.” We have invested in your home, and we share its appreciation for the future and growth. “

Since its inception, Point has invested in more than 5,000 homes. While Point has been around for several years, Lim said it has seen “the most” growth in the past year, according to Lim. Specifically he said. Point investment volume was 5x higher in the first quarter of 2022 compared to the previous quarter of 2021.

“Anaga“It was kind of a waterfall in the U.S. real estate market, and it’s probably been a year or two now,” Lim told TechCrunch, “where home equity has never been more, and still not available. . “

Runtii, a recent report indicates that “the United States is sitting on $ 26 trillion in home equity.”

The company believes that the landlord’s benefit from using Point, as opposed to taking out a home equity loan or repurchase, is “no monthly payments, no income requirements and no need for direct credit” . “

Lim described Point as a “Fintech-light property for home equity.”

“We do not own any property, and instead, we bind homeowners to investors’ homes,” he explained. “In the market, we charge fees on both sides of the transaction. We also charge fees on the management of the investor’s assets.”

Currently, the company operates in 16 states, including California, New York, Florida, Massachusetts, New Jersey, Washington, Colorado, Pennsylvania, Illinois, Maryland, Michigan, North Carolina, Arizona, Minnesota, Oregon and Virginia, as well as kale Washington. DC It plans to enter 11 more states by the end of the year, including Ohio and Nevada.

Copyright: Founders Eddie Lim and Eoin Matthews / Point

Rising interest rate mortgages have had a negative impact on the start-up of digital mortgages as the number of re-investing and buying new homes has declined. But in this case, that may actually serve as a windfall for Point and similar companies, although Lim emphasized that Point should not change its reinvestment, for example.

“People can still re-invest and use Point,” he told TechCrunch.

Other companies in the space include HomePace, which rose last week $ 7 million Series A Led by Lennar co-founders of the home builder, LENX. HomeTap More than $ 60 million in funding was raised in December. Last October, Point announced $ 146 million in guarantees. And February, Unison completed $ 443 million in security.

WestCap led Point’s Series C, which also included contributions from existing a16z, Ribbit Capital, REIT Redwood Trust mortgage, Atalaya Capital Management and DAG Ventures. New investors include Deer Park Road Management, Palisades Group and Alpaca VC.

The investment makes the total start-up total so far more than $ 170 million in equity capital.

Planning points to use its new currency to measure its output to “support greater growth,” as well as the production of new products and the expansion of its national presence. Also, naturally, it wants to hire more “indicators”, as Lim called the company’s employees. Currently, the startup employs 210 employees.

“In In many ways, many, we are just getting started, “Lim told TechCrunch,” given how many homeowners there are and how much equity there is. I ultsincerely want to bring this to every homeowner in the United States. “

Laurence Tosifounder and partner of the couple WestCap, was actually an angel investor in the company before leading this round via the company of equity growth. He first supported the company in 2018.

WestCap is leading this Point because they have developed the best and most cost-effective solution for customers with the least flexibility and the least financial burden, “he told TechCrunch. to invest in their future, even in the face of unforeseen circumstances. “

Tosi – a former finance officer at Airbnb and Blackstone – believes that Point Pay comes from competitors to work with regulators, has security capabilities and “the best level of investor base” while “providing investors with the above” – market, risky return.

For his part, Rampell – who led the company’s creation and circles of Series A, who also funded Series B as well – said in a statement that “the strength and depth of the team brought Eddie Lim together with a new point and approach. appeared. ”

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