Perch, now called Orchard, raises $36M to simplify home buying and selling

Published January 7, 2020

Perch, the vertically integrated platform for buying and selling homes, has today announced the close of a $36 million equity round led by Navitas, with participation from existing investor FirstMark Capital, Juxtapose and Accomplice. The company is also announcing that it is rebranding from Perch to Orchard.

Orchard launched in September of 2017 with a plan to bring the full home selling and buying experience under one roof. Most home buyers are what the industry calls “dual trackers,” which means they are in the process of selling their house and buying a new one at the same time.

This usually forces those buyers to either take on a huge financial risk by buying a new home before they’ve sold their last home, or to place an offer on their new home contingent on the sale of their old home, which is unattractive to most sellers.

Orchard solves this by making an offer on buyers’ old houses that is guaranteed for 90 days. Orchard co-founder Court Cunningham says that more than 85% of those homes sell at a market price before the 90-day period.

Cunningham believes that Orchard’s advantage comes not only in the fact that it has products to serve each part of the process — search, title and mortgage — but that it’s iterated on each of those pieces of the puzzle.

For example, Orchard has improved its search functionality to allow users to choose which photo they’re searching for. Let’s say the master bathroom or the kitchen is the most important room in the home to you. Orchard lets you search by pictures of that room as you browse homes. Orchard is also working on a new machine learning-powered search system that would allow users to select five homes they love to help the search algorithm find homes similar to them.

With a team of data scientists, Orchard works to price homes as “close to the pin as possible,” according to Cunningham. It’s also worth noting that Orchard compensates its realtors via salary and benefits as opposed to the usual commission framework most real estate agents live off.

Cunningham believes this is what makes Orchard a more human tech real estate platform, fully aligning the interests of the real estate agent with the buyer/seller.

When a home doesn’t sell before the 90-day period, Orchard buys the home a few points below market value through that guaranteed offer, and then makes small improvements to the home to help it sell. Orchard underwrites the home again and puts it back on the market in a process Cunningham describes as “much more capital efficient than you think.”

This is thanks in large part to the $200 million+ debt financing Orchard secured alongside its Series A funding round, and the fact that Orchard’s data scientists can help recycle those homes (and with it, the capital) relatively quickly on the market. Cunningham says the company is only using a fraction of its debt financing.

Orchard also offers a title business, letting buyers close the transaction via their phone from the comfort of their home. And Orchard shows no signs of slowing. The company currently has a mortgage product in beta.

On the heels of this new funding round, Orchard wants to double the size of its team from 150 people to 300 by the end of 2020. Cunningham also expects to see more than 100% revenue growth over the next year.

“The greatest challenge is to grow rapidly and build the tech around this that allows us to deliver in a repeatable way,” said Cunningham. “Buying a home is the biggest financial transaction of someone’s life and the human element is really important. So we need to grow quickly but in a way that is highly human and highly consistent.”

Bowery Valuation raises $12 million more to automate the real estate appraisal process

Published January 8, 2019

Bowery Valuation, a New York-based company that we told you about last year, has raised $12 million in Series A funding for its tech-enabled real estate appraisal platform. The 3.5-year-old company raised the capital from Corigin Ventures, Camber Creek, Navitas Capital, Fika Ventures and Builders.

Bowery caught our attention initially because, like a lot of real estate technology companies, it’s tackling some clunky processes that you might imagine would have been solved long ago. For example, its mobile app enables appraisers to tick off items, rather than write everything down. It automatically pulls in public record data so that appraisers needn’t surf the web to find what they need. It enables passive databasing, meaning that rental and sales comps that are often lost today can be found via a map-based search. It also uses natural language generation to help its appraiser clients produce reports.

What has changed since we last talked: the company was beginning to sell a white-label version of its app to customers, and it has since shifted toward focusing its entire product and engineering team on its own internal software.

It has also expanded its footprint more slowly than it thought it might. Though the company is currently licensed and working throughout New York, New Jersey, Pennsylvania and Connecticut, it hasn’t reached numerous farther-flung cities that continue to remain in its sights, including L.A. and Chicago.

Both are “still our first two choices for expansion,” says co-founder and CEO Noah Isaacs, adding that Bowery’s goal is now to “be in at least one of those two markets within the next nine to 12 months, with the other to follow shortly. We held off on expanding into new geographies prematurely, as we felt we had a lot more room to grow just in the tri-state area.” (Isaacs says the company has more than tripled its customer base and revenue since we last talked with the company last March.)

Though Bowery today focuses on multi-family and mixed-use assets, it also plans to expand to other commercial properties this year, says Isaacs.

Isaacs and his best childhood friend, John Meadows, founded Bowery in 2015 after working together at the same appraisal firm in New York and seeing plenty about the business on which they could improve. After bringing aboard as CTO Cesar Devars, a Princeton grad who’d studied economics and worked on several startups after graduating, the three got to work, applying and gaining acceptance shortly afterward to MetaProp NYC, a local accelerator program that focuses exclusively on real estate.

Bowery, where Meadows and Isaacs are co-CEOs, has since raised $18.8 million altogether, including from real estate giant Cushman & Wakefield.