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Today, Flyhomes announced that we at Canvas are leading their Series B, and I am personally really excited to join the company’s board and be part of this journey.
This is why we decided to invest:
- A Big Market
With over $33 trillion in homes sold annually, buying a home is the largest transaction that most Americans will ever be a part of. It can also be one of life’s most stressful purchases. Imagine engaging in that grueling home buying process while simultaneously trying to sell your current home, without knowing how much you can afford for your next move. Then layer on applying for a mortgage, sending in documentation, and convincing children to sit through open houses, and you have a very painful process. Even after you’ve found your dream home, it’s heartbreaking and especially challenging to make an offer that isn’t accepted. Technology should be able to make this process easier. It already has with apps like Redfin and Zillow that let you see home inventory online. However, those apps really don’t do much to help you actually buy a home.
When we look at the primary demographics buying homes today, Millennials are now the largest generation of home buyers, at 37% of the total. Combine this with Gen X, and the two tech-savvy generations make up 52% of all home buyers. This means that a majority of Americans purchasing a home want innovative technology to make the process easier for them.
2. A Better Product
Flyhomes is reinventing the home purchasing process and that is what got me interested in their model. The company will help you buy a home, and it will help you win. The model was first pioneered in markets with constrained inventory like Seattle and the San Francisco Bay Area for good reason: it is hard to buy a home in these markets. In that situation, Flyhomes can be very helpful to a buyer, because the service allows you to come in with an all-cash offer to actually get the house you want. In fact, Flyhomes has helped over 1,000 clients close on over $1 billion in homes bought and sold and won homes for clients using its Cash Offer, outperforming in competitive offer situations by 68% more than traditional brokerage firms. In a soft market, cash offers are also appealing not because they help you win a home, but because they provide buyers with the leverage on a home that enables them to get a discount.
Flyhomes gets even more interesting when you think about the typical real estate transaction as a whole. Only 33% of home purchasers are first-time home buyers, meaning the other 67% most likely have another home to sell. Waiting to buy your new home until after you sell your old one can be very stressful. What if we sell our home and can’t find another suitable home? What if the people we sell to won’t lease back the home for us to finish a school year for our children, or meet other timing requirements? What do we do with all our stuff when we sold the old home but haven’t yet found the new one?
It’s much easier to sell your home after you buy a new home, but most people don’t have that luxury, as it is very costly to maintain both houses, and getting approval from a lender to own two full-priced homes is beyond the financial reach of many buyers. This is where Flyhomes’ Trade Up program becomes very interesting. Trade Up gives you a minimum guaranteed price on your old home to give you the confidence to go buy a new home that you can afford. You don’t have to sell your home to Flyhomes (they don’t want to be in the business of buying it from you), instead you are aligned in the interest of trying to get the highest price possible for your old home, but you have the option to buy your new home first. You can also pay all cash for your new home which improves your chances of winning the bid you don’t have to worry about financing — Flyhomes takes care of all it. This means buyers who work with Flyhomes can make an all-cash offer on their new home — using Flyhomes’ cash — and move in before listing their current home.
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.
3. An Incredible Team
There is a lot more to the Flyhomes product that you’ll learn if you give them a try, which you can do even if you’re not actively thinking of selling or buying your home now. If you put in your address to the Flyhomes site, you can get a sense of how it works.
The real secret sauce here, as with most companies, is the people behind it. From the minute Alex Rampell introduced me to the founders of Flyhomes, I knew I was dealing with a very special team. Tushar Garg and Stephen Lane, who co-founded the company, are extremely thoughtful and engaging entrepreneurs. They’ve faced this problem firsthand and were determined to build a better solution. I then met with more than a dozen people on the Flyhomes team and talked to many customers who bought and sold homes with Flyhomes, and all of them were uniformly delightful to talk to. Housing transactions can be stressful, and of course, there were always challenging moments, but the high level of care and personal touch that Flyhomes brings to every transaction really showed.
At Canvas, when we see a big market, a better product that is helping consumers, and an incredible team, we race to invest. We’re looking forward to seeing where Flyhomes grows from here.
Articles
This story got picked up by several news outlets. Below are a few links about this financing round:
Home-Buying Startup Flyhomes Lands $141M in New Financing
Flyhomes has found success as part of a wave of tech-enabled startups aiming to transform the way Americans buy and…
fortune.com
In a field of giants, Seattle startup Flyhomes raises $141M in debt and equity to disrupt…
Seattle real estate startup Flyhomes is reloading its war chest with $141 million in new funding to carve out a spot in…
www.geekwire.com
Andreessen Horowitz-backed Flyhomes just snagged $141 million to expand its next-gen brokerage
Flyhomes, a real-estate-brokerage startup, announced $141 million in new funding on Thursday but declined to disclose…
www.businessinsider.com
Here is some boilerplate, even though I know it’s a little random to put it at the end of a Medium post…
About Canvas Ventures
Canvas Ventures is a venture capital firm based in the San Francisco Bay Area with nearly $500 million under management that focuses on Series A and Series B investments, in particular, those with marketplace business models. Canvas Ventures current portfolio and key investment areas include Fintech (Future Adviser, Possible Finance, Gabi), Logistics (Transfix, Flowspace, MasonHub), Commerce (Zola, eporta), Enterprise (Figure Eight, Platform9, Kinetica, Functionize, Luminar), Real Estate Tech (Flyhomes, Roofstock), and Health Tech (Vida).
The partners are also known for investments made prior to Canvas, which include: Lending Club, MuleSoft, Houzz, Evernote, NexTag, Check, Doximity, Upwork, Strava, Optimizely, HubHaus, and more. Rebecca Lynn, Gary Little, Paul Hsiao, and Mike Ghaffary serve as the firm’s investing partners. Visit us at www.canvas.vc.
About Flyhomes
Flyhomes is superpowering the way people buy homes. Founded in 2015 by Stephen Lane and Tushar Garg, Flyhomes has reinvented the home purchase process for buyers at every step by clearing obstacles to homeownership. To date, we have helped more than 1000 people close on more than $1 billion worth of homes using products like Cash Offers, Trade Up, and Guaranteed Offers to give buyers a clear edge in any market. To offer clients a truly seamless experience, the Flyhomes family of companies includes FlyHomes, Inc., and its wholly-owned subsidiaries: FlyHomes Brokerage, LLC, FlyHomes Mortgage, LLC, FlyHomes Closing, LLC, and Madre Homes, LLC (d/b/a FlyHomes Crew). For more information, visit flyhomes.com.
