Four months after leaving Purplebricks, the embattled firm’s top U.S. executive is looking to raise money for a new discount brokerage.
Eric Eckardt is seeking $7 million to $10 million to help grow Dwellowner, a cloud-based brokerage, via a security token offering (STO) in which investors are given cryptocurrency representing their investment. An unnamed investor has already committed to chipping in $3 million, Eckardt said in a video posted to Dwellowner’s website on Wednesday.
Eckardt said proceeds from the STO would “fuel the growth of our company,” which is currently licensed in six states and charges sellers as little as 1 percent to market their homes. He said there were several reasons for a token offering, including the fact that it offers a path to near-term liquidity for investors, who can sell tokens on a secondary market after the first year.
Eckardt founded Dwellowner in 2012 but “paused operations” for several years, according to Dwellowner’s site, while he worked at Hubzu.com, an online auction house for real estate, and Purplebricks, a U.K.-based discount brokerage that charges customers a flat fee to sell their home.
In February, Eckardt left the embattled residential firm, which has since experienced massive losses and pulled out of the United States and Australia.
Despite that company’s missteps, the concept of online-only brokerage has gained popularity as traditional firms struggle financially with the high cost of maintaining offices. For example, eXp Realty, the Sim City-like online firm, is one of the fastest-growing residential firms in the U.S., and recently set its sights on New York City.
According to its website, Dwellowner is licensed in New York, California, Connecticut, Pennsylvania, Minnesota and Florida, and can cut “thousands” in brokerage fees by charging owners 1 percent commission. For a $1 million home, sellers can save $30,000 in brokerage fees, according to a sliding scale on Dwellowner’s website.
The online brokerage also accepts offers in cryptocurrency, and it offers an iBuyer service in which homeowners can get instant offers for their homes. The service is offered in conjunction with Realeflow, a real estate investing software.
In the video, Eckardt said Dwellowner is on track to exceed its first-year revenue target, and to break even this year. It plans to roll out in two more states within the next 30 days.