Demise of title startup, SoftBank execs join SPAC

Plus, Opendoor names a president (while country waits for theirs)

National /
Nov.November 09, 2020 08:00 AM

OneTitle couldn’t beat “Big Four”

Title insurance startup OneTitle launched in 2014 with an audacious goal: eliminate agents and offer insurance for much less. Six years later, the VC-backed startup is being liquidated, after being unable to crack an opaque industry controlled by a handful of players.

Founded by Seth Brown and Daniel Price, OneTitle raised $17 million from investors to upend an industry dominated by the “Big Four”: Fidelity, First American, Old Republic and Stewart. But according to court documents, business stalled and in 2018 it began winding down. It currently has less than $400,000 in assets.

Before winding down, OneTitle tried to sell itself, court documents show. It was in talks with Munich Re, a publicly traded firm in Germany, and the Related Companies. It entered a purchase agreement with New York-based insurer Ameristract, but the deal collapsed when financing fell through.

OneTitle hasn’t been the only startup aimed at disrupting the insurance sector. Most startups are focused on digitizing a process that still involves reams of paper. In May, States Title raised $123 million to digitize title and mortgage. The same month, title startup Spruce raised $29 million. Even giant First American is coming around. In February, it agreed to buy Docutech, which generates loan documents and offers e-signing, for $350 million.

“I’m quite pleased we can offer some counter programming to the election news drip torture.”

Zillow CEO Rich Barton, during Nov. 5 earnings call 

The new PaaS? Parking (lot) as a service

Reef Technology, which operates logistics hubs and cloud kitchens in parking lots, has secured $1 billion in fresh capital. The company closed a $700 million equity round led by Mubadala Investment Co., according to Bloomberg. SoftBank, Oaktree, UBS AM and Target Global also participated. In addition, Reef and Oaktree are collaborating on a $300 million investment vehicle.

Based in Miami, Reef was founded in 2013 as ParkJockey. The company leases the parking lots it operates, and then offers them up as hubs for cloud kitchens, last-mile delivery and even retail shops and healthcare clinics. It also partners with service providers including Bond (a last-mile delivery startup), Carbon Health (a health care services clinic) and Get Charged (an electric vehicle charging company).

Reef currently has 15,000 employees and a network of 4,500 locations across the U.S. The funding will allow it to grow to 10,000 locations and turn parking lots into “neighborhood hubs,” co-founder and CEO Ari Ojalvo told TechCrunch.

 

Checking in … on Airbnb’s IPO filing

Airbnb is expected to file publicly next week for its much-anticipated IPO. That would put the short-term rental company on track to go public after a roadshow in December.

The filing will give investors a peek under the hood. Airbnb secured $2 billion in emergency funding after losing a $1 billion bookings because of the pandemic. But bookings rebounded quicker than expected this summer, particularly outside of cities. Airbnb is looking to raise around $3 billion at a $30 billion valuation, according to Reuters.

SoftBank execs couldn’t resist the SPAC trend

Justin Wilson, a senior investor at SoftBank’s Vision Fund who focused on proptech, is jumping on the SPAC bandwagon. With colleague Ted Fike, he joined Gores Group, one of the most prolific blank-check investors, Axios reported.

Until last month, Wilson sat on the board of SoftBank-backed companies including Clutter, Opendoor, Katerra and Compass. In recent weeks, the Vision Fund has grappled with other high-profile exits, including chief operating officer Ruwan Weerasekera, Bloomberg reported. Penny Bodle, who headed investor relations, also departed, as did Avi Golan, an operating partner, and Maria Khan, U.K. chief risk officer.


STAT OF THE WEEK

15%

Uber’s stock pop after California voters approved Proposition 22, keeping drivers as contractors not employees.


While awaiting U.S. presidential vote results …

Opendoor hired a new president, former GoDaddy COO Andrew Low Ah Kee. In a blog post, CEO Eric Wu said Low Ah Kee would focus on operations as the iBuyer expands into new markets. He also announced that Julie Todaro, who joined as president of homes and services, would be taking early retirement.

Last month, IPO-bound Opendoor hired Daniel Morillo from Ken Griffin’s Citadel. Opendoor sold 18,000 homes last year, generating $4.7 billion in revenue but losing $339 million. In September, it said it would go public in a merger with Chamath Palihapitiya’s blank-check company.

Breather explores sale

Breather, which rents out office space by the day, is looking into a possible sale or capital raise. The Montreal-based startup hired Moelis & Company to help it weigh the options, reported Business Insider, which noted other flex-office companies are in distress. Revenue across the industry has dropped 30 percent, according to one estimate.

Founded in 2012, Breather has raised $122 million and it has locations in New York, San Francisco and London. Last month, it offered membership as a way to guarantee revenue.

Tech startups rethink NYC office space

It’s sublet city for tech companies in NYC. Tech firms leased 7.5 million square feet of Manhattan office space in 2019, a figure that has now fallen to 2.8 million square feet this year, according to Colliers International. During the third quarter, more than 3 million square feet of space was put up for sublet, half of it from TAMI tenants.

Although Facebook this summer inked a major lease to occupy 730,000 square feet at the Farley Building, office leasing across the board is on track to finish the year with the lowest leasing volume in 20 years.



Ordering construction materials? There’s an app for that

Around $250 billion is spent on building materials every year. To help keep spending in check, Tishman Speyer and Suffolk Construction backed a startup aimed at streamlining the supply chain.

This month, San Francisco-based Agora closed a $7 million Series A led by 8VC with participation from Tishman, Suffolk, Abstract Ventures, BoxGroup and Eventbrite co-founder Kevin Hartz. It brings the startup’s total funding to $11 million.

Founded in 2018, Agora connects construction managers, purchasing agents and vendors on a single platform where they can place, track and manage orders in real time. Founder Maria Rioumine said the construction industry places billions of dollars of purchase orders each year, all managed with pen and paper or primitive spreadsheets. “That, to us, seemed crazy,” she said.


Small bytes

💰Zillow’s Q3 profits soared to $40M with iBuying deals. Revenue dropped 12% to $656.7M.

💰Redfin’s profit surged 4x to $34.2M during Q3. Its revenue was $237 million, down 1%.

⚐ CoreLogic investors Cannae and Senator Investment Group dropped their bid to buy the real estate data company.

🏠Atmos, a home-building startup in North Carolina, raised $4M. Khosla Ventures led the round, with participation from JLL Spark and a group of TikTok influencers.

🛋 Mexico City-based GAIA, a high-end furniture design startup, raised $15M.

🧹 Neu, a cleaning startup catering to Airbnb hosts, raised $700K for Covid recovery.

💸 RealBlocks, a platform for alternative investments like real estate, raised $7M.

🚚 Amazon will make rural deliveries because of postal service delays.

👨spacesOS, a European office management app that’s raised €2.5M, hired Greg Materdomini from Convene to head its U.S. operations.


 
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