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Homebuying startup Flyhomes closes $150 million Series C
Amid a recent tear in residential real estate investment, venture capitalists are looking to get a piece of homebuying startup Flyhomes.
The five-year-old startup announced today that they’ve closed a $150 million Series C round co-led by Norwest Venture Partners and Battery Ventures. Fifth Wall, Camber Creek, Balyasny Asset Management, Zillow’s Spencer Rascoff and existing investors Andreessen Horowitz and Canvas Partners also participated in the round. Norwest’s Lisa Wu and Battery’s Roger Lee are joining Flyhomes’ board as part of the deal.
The end-to-end residential real estate startup says they handle “every step of the homebuying process, from brokerage to mortgage,” building financial tools that customers need throughout the process. The company has now raised some $310 million in total.
The startup is well-positioned during a historic run-up of home prices in the U.S. that has made deals more competitive than ever for prospective buyers. A recent report by Redfin notes that more than half of U.S. homes are selling above their asking price right now, up from one in four a year ago. A Zillow report notes that nearly half of U.S. homes are selling within one week of going on the market.
Flyhomes’s Cash Offer lending product allows consumers purchasing homes to make more attractive all-cash offers to sellers, with the company noting that even if a buyer ends up backing out of the deal, Flyhomes will still buy the home themselves. Central to the startup’s business is sellers being more amenable to all-cash offers, allowing consumers making them to win deals even when they aren’t the highest bidders.
The company says it has bought and sold more than $2.6 billion worth of homes since launching in 2016.
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Notarize raises $130M, tripling valuation on the back of 600% YoY revenue growth
When the world shifted toward virtual one year ago, one service in particular saw heated demand: remote online notarization.
The ability to get a document notarized without leaving one’s home suddenly became more of a necessity than a luxury. Pat Kinsel, founder and CEO of Boston-based Notarize, worked to get appropriate legislation passed across the country to make it possible for more people in more states to get documents notarized digitally.
That hard work has paid off. Today, Notarize has announced $130 million in Series D funding led by fintech-focused VC firm Canapi Ventures after experiencing 600% year over year revenue growth. The round values Notarize at $760 million, which is triple its valuation at the time of its $35 million Series C in March of 2020. This latest round is larger than the sum of all of the company’s previous rounds to date, and brings Notarize’s total raised to $213 million since its 2015 inception.
A slew of other investors participated in the round, including Alphabet’s independent growth fund CapitalG, Citi Ventures, Wells Fargo, True Bridge Capital Partners and existing backers Camber Creek, Ludlow Ventures, NAR’s Second Century Ventures and Fifth Wall Ventures.
Notarize insists that it “isn’t just a notary company.” Rather, Canapi Ventures partner Neil Underwood described it as the “last mile” of businesses (such as iBuyers, for example).
The company has also evolved to “also bring trust and identity verification” into those businesses’ processes.
Over the past year, Notarize has seen a massive increase in transactions and inked new partnerships with companies such as Adobe, Dropbox, Stripe and Zillow Group, among others. It’s seen big spikes in demand from the real estate, financial services, retail and automotive sectors.
“In 2020, the world rushed to digitize. Online commerce ballooned, and businesses in almost every industry needed to transition to digital basically overnight so they could continue uninterrupted,” Kinsel said. “Notarize was there to help them safely close these deals with trust and convenience.”
The company plans to use its new capital to expand its platform and product and scale “to serve enterprises of all sizes.” It also plans to double down on hiring in the next year.
“Notarize is disrupting outdated business models and technologies, and there’s massive potential, particularly in the financial services space, as more companies will need to offer secure digital alternatives to in-person transactions,” Canapi’s Underwood said.
Notarize’s success comes after a difficult 2019, when the company saw “critical financing” fall through and had to lay off staff, according to Kinsel. Talk about a turnaround story.
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How to raise your first VC fund
Charles is a principal at Bling Capital and manages his own angel investment vehicle. Previously, he was an investor at TI Platform Management and Manhattan Venture Partners. He has quarterbacked investments in nine unicorns over the course of his career.
As a founding member of TI Platform Management, I have quarterbacked more than $200 million in investments into first-time fund managers around the world. That portfolio includes being one of the first institutional checks into Atomic Labs ($170+ million, SaaStr ($160+ million) and Entrepreneur First ($140+ million), among many others.
Having seen successful returns as a fund manager and an early-stage VC (as well as recently raising my own angel fund), I’ve formulated several best practices and strategies for investing in fund managers. If you want to raise your first fund, here’s how.
Understand the mentality of an LP
Just as VCs bucket startup founders into categories, limited partners (the investors in your venture fund, also known as “LPs”) have an unwritten way of categorizing venture managers. The vast majority fit one of three archetypes:
- Former founder/operator turned VC
- Spin-off manager from a mega fund
- Angel investor with a strong track record
Here’s how each is perceived by institutional LPs and the unique blockers they have to overcome:
Former founder/operator turned VC
Having been through the journey of starting a company, former founders/operators often have strong intuition in identifying founders and an empathy/rapport that raises their win-rate on deals. Additionally, having built an innovative company, they can bring special insights in where the market is headed. Building a company, however, requires different skills from founding a fund.
If you’re a former founder/operator turned VC, expect LPs to ask questions that suss out:
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