Future City: Better.com’s troubles worsen
For better or worse
Digital mortgage lender Better.com cut roughly 3000 employees, or about a third of its staff, citing lower demand for its services in a rising interest rate environment.
The layoffs came just a few months after CEO Vishal Garg fired 900 staff over a Zoom call — an event that prompted an internal review and Garg’s subsequent leave of absence. It may also have impacted the company’s ability to attract new clients.
“We have huge opportunities ahead to grow and to serve, but we must adjust to volatility in the interest rate environment and refinancing market to get there successfully,” CFO and interim president Kevin Ryan wrote in a memo to staff.
Employees learned about the latest round of cuts a day early when the company accidentally leaked severance payments. “No email, no call, nothing,” an anonymous employee told TechCrunch. “This was handled disgustingly.”
Through the Roofstock
The online marketplace for single-family rentals, Roofstock, went from a $600 million to a nearly $2 billion valuation in a little more than two years.
The Oakland-based company raised $240 million in a Series E round led by Softbank’s Vision Fund 2, with the aim to double its staff this year and pursue “strategic M&A,” co-founder and CEO Gary Beasley said. Roofstock claims its revenue nearly tripled last year.
Despite surging home prices nationwide, investors have raided the single-family rental market in recent quarters chasing passive income from rising rents. The cohort was responsible for a record 18.4 percent of all home sales in the U.S. in the fourth quarter, Redfin data showed.
“There has never been a time quite like this for single-family real estate,” Beasley said.
Kohla Ventures, Lightspeed Venture Partners and Bain Capital Ventures, among others, also participated in the Series E.
OpenSpace, a construction-tech startup, raised $102 million in a Series D round at a $902 million valuation — more than doubling its valuation from a year ago.
The San Francisco-based software company stitches together streams of photos of job sites, taken passively with helmet cameras, to give developers and contractors an idea of their progress, and create a record of it.
“The main thing that is missing in this industry is a trusted set of facts about what is actually happening,” co-founder and CEO Jeevan Kalanithi said.
The technology, which has been deployed on more than 10,000 sites in 75 countries, is designed to be used by everyone on a job, including owner-developers, general contractors and the trades.
PSP Growth, the venture and growth equity arm of PSP Partners, led the funding round.
STAT OF THE MONTH
There were 12 new proptech unicorns in 2021.
Hitting a wall
Fifth Wall, the proptech-focused venture capital firm, bailed on its second special purpose acquisition company, or SPAC, dubbed Fifth Wall Acquisition II.
Fifth Wall had unveiled its plans for the $150 million blank-check company about a year ago and recruited Goldman Sachs, Citi and Deutsche Bank as joint underwriters on the deal.
The bottom has since fallen out of the SPAC market and the stock market, broadly, and many of the proptechs that went public via SPAC mergers during the pandemic now trade well below the $10 buy-in price — including SmartRent, the home automation startup Fifth Wall took public with its first SPAC last August.
Fifth Wall, notably, launched a third SPAC in April 2021 and it raised $275 million in its Nasdaq debut. That entity has yet to merge with a target.
Looking to scale in the Southeast, Alfred, the rental management software startup, raised $125 million and bought Charlotte-based property manager RKW Residential.
Alfred digitizes the “resident experience,” so that renters, using only their phone, can tour a property and sign a lease, book amenities and utilities, communicate with managers and other tenants, and coordinate services like grocery delivery and cleaning.
Alfred deployed $50 million of the total debt and equity capital raised from Rialto Capital and others to buy Charlotte-headquartered RKW and grow the combined platform, Marcela Sapone, the startup’s co-founder and CEO, said.
The company, she said, will use the rest of the funds raised to buy other “property managers and other tech companies.”
“It’s definitely about rapid expansion,” Sapone said.
• Ember, a startup that sells fractions of high-end vacation homes, raised $17 million from venture capitalist Peter Thiel and others.
• Milo, a fintech that offers crypto mortgages, raised $17 million in Series A funding.
• Piñata, a rewards and credit building program for renters, raised $13 million in a Series A round.
• Daybase, a flex office company bringing coworking to residential areas, raised $10 million in seed funding.
• CoFi, a marketplace for construction financing, raised $7 million in a seed round.
• Moliving, a luxury hospitality startup that facilitates stays in mobile, modular housing, raised “a couple million” dollars in a seed round, founder and CEO Jordan Bem said.
• The Host Co., a goods marketplace for Airbnb and other short-term rentals, raised nearly $2 million in seed funding.
• Cloud Apartments, a company that builds affordable, prefabricated apartments, launched.
• Flock Safety, an anti-crime company that uses technology to capture license plates, expanded its services to residential and commercial real estate owners and operators.