Homebuying start-up Perch raises $220M in new funding round
They are entered a crowded field of competitors like Opendoor and Zillow
If you want to sell your home with one click, more and more companies are competing for your business.
Perch, an iBuying start-up that buys and sells homes, has raised $20 million in equity and $200 million in debt in a new funding round to scale up its business.
“It is allowing us to add fuel to the fire,” said Court Cunningham, Perch’s CEO.
The latest funding round brings the company’s total equity raised to $51 million. FirstMark Capital led the Series B round, alongside Accomplice and Juxtapose.
The company focuses on “dual trackers,” people who are selling their homes in order to buy a new one. They can sell a property directly to Perch, who then offer a brokerage service to find them a new home.
Cunningham says the model makes home selling and buying simpler and easier. They currently charge a traditional 6 percent fee, but their online platform also includes notary and title services.
“All the players — Zillow, Redfin, Opendoor, Offerpad — are just solving the sell side of the equation,” Cunningham said, “What they’re not doing is solving the other side of the problem: Let me find your new house.”
Perch is headquartered in New York, but piloted its platform in Texas in early 2018, launching first in San Antonio and then expanding to Dallas. Cunningham said they plan to launch in Austin in the next few weeks and will expand to more markets in 2020.
“We think we can get to a 4 or 5 percent market share over the next few years,” Cunningham said.
Perch is set to compete with rival iBuyers such as Opendoor, which uses an algorithm to buy and sell homes. The company announced last month it had raised $300 million, bringing its valuation up to $3.8 billion. In the same month, another competitor, Offerpad, raised $975 million in equity and debt.
Companies like Zillow, Redfin and Keller Williams are also investing in the home flipping business. In a February earnings call, Zillow’s new CEO Rich Barton told investors the company was “formulating a new mission” by expanding its home-buying arm Zillow Offers.