Better.com plots IPO after $4B valuation, more co-working losses

National /
Nov.November 16, 2020 08:00 AM

Better, better, best

Bolstered by low interest rates and unprecedented demand for all things digital, online lender Better.com has raised $200 million ahead of a rumored IPO.

The round, led by private equity firm L Catterton, valued the company at $4 billion. Based in New York, Better.com has now raised $410 million since 2016 from investors including Citi, Goldman Sachs, Ally Financial, American Express Ventures and Ping An.

Better.com has hired 2,500 employees since the onset of the pandemic. Kevin Ryan, a banker at Morgan Stanley, joined as CFO last month.

According to Bloomberg, Better.com recently tapped Morgan Stanley and Bank of America and could file confidentially for an IPO as soon as January. The company is projecting $800 million in net revenue this year.

Better.com is among a slew of companies looking to bring mortgage lending online. Last month, two former Zillow executives launched Tomo with $40 million in backing from Trulia co-founder Pete Flint and former Zillow CEO Spender Rascoff. LoanSnap snagged a $10 million investment this spring from Alex Pall and Drew Taggart, the DJ duo behind the Chainsmokers.

Title industry giants are also doubling down on digital tools. This week, First American said it would invest $40 million into Endpoint, a title and escrow startup it launched last year. That’s on top of the $30 million it already pumped into Endpoint to develop the standalone company, which bills itself as a mobile-first service. Earlier this year, First American bought housing tech company Docutech for $350 million.

“We can go on the attack at the same time as we keep strengthening our defenses.”

— Masa Son, after SoftBank reported a $6B profit  

Losses in the land of co-working

WeWork burned through $517 million during the third quarter, as Covid kept battering the office market. Since the start of the year, the beleaguered co-working startup has gone through $1.7 billion, the Financial Times reported, citing an internal memo. During the third quarter, sales fell 13 percent and membership dropped 11 percent to 542,000.

Bad as they sound, the numbers are improving. WeWork’s losses were $671 million during the second quarter. CEO Sandeep Mathrani has aggressively cut costs by laying off employees, shuttering locations and selling assets.

Longtime exec Jennifer Berrent is in talks to leave WeWork in early 2021, per Bloomberg. The chief legal officer joined the startup in 2014. Berrent has been named in two lawsuits, one of which alleges that she called a WeWork employee’s pregnancy a “problem” that needed “to be fixed.”

Meanwhile, rival Knotel, which once cheered WeWork’s demise, is looking to trim 60 percent of its 4.8 million-square-foot global portfolio, per Business Insider. The flex-office provider has been slammed with losses and lawsuits alleging unpaid rent.


Hot new building amenity? Electric cars

Envoy, a startup that provides “turnkey” electric-vehicle services to the real estate industry, has raised $81 million in debt and equity.

Based in Culver City, California, Envoy bills itself as a “mobility-as-an-amenity” company — sort of like Zipcar for electric vehicles. It was founded in 2017 by Aric Ohana and Ori Sagie. The $81 million includes an $11 million Series A co-led by Building Ventures and Shell Ventures, the corporate VC arm of the oil giant. Macquarie is providing $70 million in financing to help Envoy scale to “thousands of vehicles” nationwide. The company currently operates in 10 states.

SoftBank revs its engines — again

Masa Son is popping champagne somewhere. SoftBank Group notched $6 billion in profits during the third quarter, compared to a $6.4 billion loss in the prior-year period. (That was attributable to a writedown of its WeWork investment, which Son has described as a lapse in judgement.)

For the quarter, SoftBank got a boost from investments in Beike, a Chinese online real estate broker that went public in August. SoftBank said it booked ¥537 billion, or $5.1 billion, on the investment.


STAT OF THE WEEK

$20

Investments in real estate tech between January and October, according to the Center for Real Estate Technology & Innovation.


What the what, Airbnb?

Investors are going to have to wait a little longer for Airbnb’s IPO filing.

The hospitality startup pushed off filing its prospectus to distance itself from the U.S. presidential election, Bloomberg reported. At this point, it’s just another delay for the long-awaited IPO, which got derailed by Covid earlier this year. After a surprising rebound, Airbnb filed confidentially to go public in August with its sight set on Nasdaq. However, Airbnb is also mulling an IPO on the Long-Term Stock Exchange, a Silicon Valley exchange geared toward companies committed to environmental, social and corporate governance values.

Investors funnel $14M into online leasing

In-person leasing felt outdated for years. Now it’s downright obsolete.

For Funnel, a New York City startup that helps landlords manage their rental properties, demand for online leasing fueled a $14.1 million Series AA. RET Ventures led the round, with participation from Camber Creek and Trinity Ventures.

Founded in 2011 as Nestio, Funnel raised $8 million before Covid but reopened the round after bringing 250,000 units onto its platform. The funds will enable it to launch a virtual leasing assistant and online leasing tool, which was previously in development.

“No more paper,” said CEO Tyler Christiansen. “Everything is remote.”


Local Logic nabs $$ for AI-powered investing advice

A Montreal startup that uses artificial intelligence to help investors make real estate decisions has just raised $8 million CAD.

Founded in 2015, Local Logic uses geo-spatial and user-generated data to quantify metrics that are usually seen as subjective, like lifestyle and location. The round was led by GroundBreak Ventures with participation from Shadow Ventures, BDC Capital, Jones Boys Ventures Cycle Capital and Desjardins Capital. It brings the company’s total funding to $10 million CAD.

Local Logic, which claims 30 billion data points on its platform, said it plans to double its 26-person team as part of a push to increase its U.S. footprint.


Small bytes

? Crowdstreet launched a $20M to $30M e-commerce property fund.

? Curbio, which fronts money to fix up homes before they hit the market, raised $25M. The startup gets paid back at closing.

? iBuyer Offerpad hired David Connelly, ex-Citigroup exec, as chief growth officer, and Ben Aronovitch as chief legal officer.

? Danish co-living startup LifeX raised €6M.

? R-Hauz Solutions, a Toronto construction startup that’s borrowing mass-production techniques from the auto industry, raised $4.5M CAD.

?Spruce, a marketplace for housekeeping, pet care and other household chores, raised $8M.

? Tishman Speyer’s SPAC — TS Innovation Acquisition Corp. — officially went public, raising $300M. CBRE is raising $400M for a blank-check company.

? Montreal-based Building Stack launched a free online payment tool for renters.


 
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