Fifth Wall is participating in a round led by Palo Alto-based Norwest Venture Partners and Boston-based Battery Ventures.
The raise also includes investments from Spencer Rascoff, co-founder of Seattle-based real estate market platform Zillow Group Inc.; Rockville, Md.-based venture capital and private equity firm Camber Creek; Chicago-based hedge fund Balyasny Asset Management; Menlo Park-based Andreessen Horowitz; and Portola Valley-based Canvas Partners.
Flyhomes co-founder and Chief Executive Tushar Garg said the Series C funding will be used to expand the company to new markets and boost its presence in its existing markets in Los Angeles; the Bay Area; San Diego; Seattle; Boston; and Portland, Ore.
Flyhomes plans to expand nationwide in the second half of the year, he said.
“Last year, we launched the Southern California market right before the pandemic,” said Garg, who shrugged off concerns about a housing bubble or prices escalating too rapidly.
“We stabilized, and now the market is going on the same trajectory or better compared to some of our other markets. The product is working and resonating really well. Now we are basically growing really rapidly,” he added.
The L.A. market is quickly becoming the company’s top sales market, according to Garg, who declined to disclose revenue projections.
With additional funds, Flyhomes plans to double its companywide headcount of 400 employees within the next year while integrating new services, Garg said.
Flyhomes has a simple business strategy. Home buyers who use the company to buy a new property get a guarantee that their old home will sell at an agreed-upon price within 90 days. If not, Flyhomes will buy it. If it sells above the set price during that period, the seller keeps the extra cash.
Flyhomes makes money from brokerage fees, not from flipping homes, Garg said.
In addition to the $150 million raised in the Series C, the company has raised another $190 million in venture capital since its founding in 2015.
In 2019, the company raised $141 million in debt and equity.
Fifth Wall Ventures, founded in 2016 by Brad Greiwe and Brendan Wallace, views companies like Flyhomes as a sweet spot for investment because it fills the void between mammoth legacy real estate companies and technology startups.
The VC firm targets proptech firms that intersect technology and real estate.
Greiwe co-founded single-family home rental company Invitation Homes Inc., which went public in 2017 and today has a $21.2 billion market capitalization. Wallace started his career as a real estate analyst at Goldman Sachs & Co. and worked for Blackstone Group’s real estate division.
Fifth Wall has built a name for itself through early investments in breakout startups, several of which are now unicorns — privately held startups with valuations exceeding $1 billion.
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