Flyhomes, the four-year-old real estate startup that lets people make cash offers on homes while they work to secure a mortgage, announced a new round of funding and a new service for buyers on Thursday.
The Seattle-based brokerage said it raised $141 million in debt and equity that it’ll use, in part, to grow a new part of its business that targets trade-up buyers. People who use Flyhomes to buy a new property will 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.
Flyhomes makes its money from brokerage fees, not from flipping homes, said Tushar Garg, Flyhomes’ CEO and co-founder. Executive Chairman Steve Lane, Flyhomes’ other co-founder, got the idea for the company when he was buying a home in 2015.
“For most people, a home is the single biggest purchase they’ll ever make, and the traditional process of making that purchase is fraught with obstacles, stress and worry,” Garg said. “We believe our approach – which supports homebuyers with a vertically integrated product offering – is the future of real estate.”
Flyhomes said $21 million of the new funding is Series B equity financing led by Canvas Ventures, with participation from existing investors Andreessen Horowitz, which gave early backing to Facebook, Airbnb, Skype, Twitter, and other big-name startups. The rest is debt financing from multiple lenders, including Goldman Sachs’ Genesis Capital.
Canvas Ventures General Partner Mike Ghaffary said in a Medium post he was joining Flyhomes’ board.
“Flyhomes is reinventing the home purchasing process, and that is what got me interested in their model,” Ghaffary wrote. “Unlike the iBuyer model, Flyhomes’ business model takes a different approach. Rather than buy homes from customers, Flyhomes lists homes to get the maximum value for the customer while providing a guarantee that the home will sell within 90 days, or they will buy it only as a safeguard.”