PropTech Market Update 2019 Year-End Review - PRELIMINARY CONFIDENTIAL DRAFT - GCA Advisors
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PRELIMINARY CONFIDENTIAL DRAFT PropTech Market Update 2019 Year-End Review
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
EXECUTIVE SUMMARY – 2019 REAL ESTATE TECHNOLOGY
Another Record Year in PropTech M&A & Growth Equity Investment
» Equity and debt raised in U.S. PropTech was up 69% y/y in 2019 to $9.0bn, reflecting continued momentum for growth companies in the PropTech sector
− 78 deals of $20MM+ in equity investment, a 105% increase over 2018 → scale leaders emerging across all categories and investor appetite remains
strong to continue to back “winners” with incremental capital
− iBuyers and alternative RE financing firms are some of the biggest growth capital recipients in 2019 with major investments into companies like
Opendoor, Ribbon, Point, Figure and many others
» Significant M&A activity with 104 PropTech M&A deals in 2019
− M&A driven primarily by strategics, but financial sponsors (e.g. Silver Lake, Lovell Minnick, etc.) and sponsor backed strategics (e.g. Ellie Mae, MRI,
Lightbox, etc.) remain highly acquisitive as well
− Consolidation driven by economies of scale and the emergence of platform tech providers across different end markets (e.g. Lone Wolf in RRE,
Building Engines in CRE, Procore in ConTech, etc.)
» Sentiment for continued PropTech investment and M&A in 2020 remains strong with 96% of investors expecting either an increase or the same amount
of M&A activity in the next twelve months(1)
» GCA remains one the most active M&A and growth capital advisors in the PropTech segment globally, having advised on 6 deals in the sector in 2019 and
24 in the sector in the past 3 years
GCA 2019 PropTech Transaction Activity
Acquired by Acquired by Acquired by Acquired by Majority interest Acquired
acquired by
A Portfolio Company of A Portfolio Company of
We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller We advised the buyer
Source: Capital IQ as of 1/25/20, Pitchbook, press releases.
(1) MetaProp Mid-year 2019 Global PropTech Confidence Index as of 7/24/19. 2
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
2019 PROPTECH SECTOR SUMMARY
Most active year in history
» $5.3Bn of investment in the residential real estate tech sector in 2019, primarily driven by tech enabled brokerages
(e.g. Compass, REX, Side, etc.), iBuyers (Opendoor, Offerpad, etc.) and an emerging category of alternative financing
firms associated with home equity / down payment assistance (e.g. Ribbon, Figure, ZeroDown, Hometap, etc.)
» RRE M&A activity driven by SaaS software consolidation in the broker, team and agent productivity category:
Residential Real Estate
/ / /
− GCA expects continued consolidation in the RRE software category as brokers, teams and agents demand
integrated enterprise end-to-end productivity platforms to control data and run more efficient operations
» Massive year of investment and growth for the CRE sector with 183 U.S. growth investments and $3.7Bn invested
into the space in 2019
» CRE data and productivity platforms attracting significant investment and were key M&A targets
Commercial Real
Estate Acquired by Acquired by
$128M capital raised $115M(1) investment
» CoStar, Real Page and MRI remain highly acquisitive, using M&A to add incremental products and expand into new
categories
» Highly active year for companies working to drive efficiency in the mortgage origination, closing, title and escrow
process
− Qualia, Spruce, Notarize, Modus and States Title all raised capital in 2019 to digitize and accelerate the title
Mortgage / P&C escrow and closing process
Insurance / Title − Mortgage customer capture platforms, Blend and Roostify, both raised capital in 2019
− Multiple rounds of investment in direct to consumer brands focused on renters and homeowner insurance (Kin,
Lemonade, Openly)
» Category M&A driven by Ellie Mae’s sale to Thoma Bravo and their subsequent acquisition of Capsilon
Source: Capital IQ as of 1/25/20, Pitchbook, press releases.
(1) Includes $89MM to buy out DMGT’s existing stake; includes an unknown amount of debt. 3
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
GCA 2019 PROPTECH TRANSACTIONS
GCA U.S. PropTech Team Global Leader in PropTech Advisory
Chris Gough
Managing Director Acquired Majority Acquired by Acquired by Acquired by
interest
Head of Real Estate Technology acquired by
Phone: (415) 318-3658 A Portfolio Company of A Portfolio Company of
cgough@gcaglobal.com
We advised the buyer We advised the seller We advised the seller We advised the seller We advised the seller
Marcus Anthony Zain Azeem
manthony@gcaglobal.com zazeem@gcaglobal.com
Lizzie Cooperstone Acquired by Majority Interest
Acquired by
Acquired by Acquired by Refinanced
lcooperstone@gcaglobal.com
Key Sub-Sector Coverage Verticals
We advised the seller We advised the seller We advised the seller We advised the seller We advised the lender
Residential RE Software
Commercial RE Software
Acquired by Acquired by Acquired by Acquired by Investment from
Mortgage / Lending
Title / Insurance We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller
Home Services
Facilities Management a portfolio company of
Investment from Acquired by Acquired by MBO backed by
Construction Tech Acquired by
IWMS We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller
4
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK
Global investment bank providing strategic M&A and capital markets advisory services to growth companies and market leaders
MANCHESTER LEEDS
PARIS FRANKFURT
BIRMINGHAM MUNICH
KYOTO NAGOYA
ZURICH TOKYO
LONDON SHANGHAI
NEW YORK
MILAN
NEW DELHI OSAKA
TEL AVIV FUKUOKA
SAN FRANCISCO
TAIPEI
MUMBAI
SINGAPORE HO CHI MINH CITY
Global platform:
Sector expertise: Exceptional cross-
23 offices in key Experienced team:
Expansive coverage border capabilities:
markets across Over 450 employees
and deep Over a third of all
America, Asia and across the globe
specialization transactions
Europe
Broad spectrum
Diversified
Strong reputation of clients:
business model:
and track record: Leading
Geographically
High number of conglomerates, top
balanced, synergistic
repeat clients and private equity firms
and complementary
referrals and emerging high-
focus areas
growth companies
5
GCA operates as GCA in America and Asia, and GCA Altium in Europe
I. PROPTECH MARKET SUMMARY
II. PUBLIC MARKETS
III. RESIDENTIAL REAL ESTATE TRENDS
IV. COMMERCIAL REAL ESTATE TRENDS
V. MORTGAGE & FINANCING TRENDS
VI. ADDITIONAL TRANSACTION CASE STUDIES
VII. M&A AND MARKET COMPS BACK-UP
VIII. GCA 2019 TRANSACTION CASE STUDIES
6
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
ANOTHER RECORD YEAR – REFLECTED IN 2019 DEAL FLOW
U.S. Real Estate Technology Venture Investment (2014 - 2019)
($MM) Equity Raise Value Debt Raise Value
$8,981
324 U.S. PropTech deals in
2019, the most active year 69%
$2,060
of financing to date, totaling Increase in equity
$9.0Bn in equity and debt, & debt raised y/y
an increase of 69% y/y in
total funding
$5,308
Q1
$475 $2,153 Q4
$4,477
$2,730
$250
$8,981
$6,921 Q2
$2,748
$1,772
Q3
$1,823 $4,833
$4,226 $2,326
$1,339
2014 2015 2016 2017 2018 2019
Avg. Deal
Value:
$5.2 $10.6 $8.0 $20.6 $20.1 $21.4
Source: Capital IQ as of 1/25/20, Pitchbook, press releases.
Excludes Oyo Rooms and The We Company financing rounds.
Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology.
7
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
INVESTMENT BY CATEGORY
U.S. Investment by Category from 2019 ($MM)
$3,692
Commercial
41% $8,981 debt
& equity
Commercial
raised $5,289
Residential
Residential
59%
CRE / Facilities Residential Real Estate Solutions
CRE Marketplace / Management iBuyers
Multi-family Financing Assistance
Construction Tech Referral Networks
Mortgage / Closing Software
P&C Insurance Tech
Construction Tech
Investment Marketplaces
8
Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
ANOTHER RECORD YEAR – REFLECTED IN 2019 DEAL FLOW
U.S. Growth Capital Raises Greater than $20MM Top 10 U.S. Equity Rounds of 2019
($MM)
Increase in round sizes signals emergence
Latest
of scale leaders and reflects TAM for sub- Select Reported
categories of market Date Company Investor(s) Amt. Invested Funding to Date Valuation
8/21 $400 $565 $1,000
78
7/30 $370 1,513 $6,400
105%
Increase in 10/29 $319 $527 >$1,000
Capital Raises
Greater than
4/11 $300 $480 >$2,000
$20MM y/y
$1,345 Equity
3/20 $300 $3,800
/ $3,000 Debt
38
7/12 $225 $358 $1,100
32
2/20 $200 $297 NA
15 16 4/18 $160 $185 $240(1)
8
6/24 $130 $310 NA
5/14 $123 $468 $2,100
2014 2015 2016 2017 2018 2019
Source: Capital IQ as of 1/25/20, Pitchbook, press releases. (1) Estimated post-money valuation per Pitchbook.
Excludes Oyo Rooms and The We Company financing rounds.
Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology.
9Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
GROWING ECOSYSTEM OF PROPTECH-FOCUSED PE / GROWTH INVESTORS
Portfolio Companies
10Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
REAL ESTATE PRIVATE COMPANY FUNDING LEADERS
Other Mega Funding Leaders
Equity Raised to Date:
>$500MM
1 ($4.4Bn) ($370MM) ($614MM) ($468MM)
$200MM - $500MM
1 ($3.1Bn) ($8.9Bn Equity /
$6.1Bn Debt)(1)
39 companies
$100MM - $200MM
1 raised $100MM+
126 companies
raised $25MM+
$50MM - $100MM
$25MM - $50MM
Source: Pitchbook, CB Insights, Company filings, Company websites, press releases.
(1) Funding totals exclude secondary transactions. 11Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
HEALTHY M&A MARKET
Annual U.S. PropTech M&A Activity Select U.S. 2019 PropTech M&A Transactions
($MM)
• Significant 2019 M&A activity Enterprise
Buyer Target Announced Date Value
− 80% strategic acquirers
11/6 $580
− 20% financial acquirers
11/6 NA
105 104
10/28 NA
10/1 $450
9/6 NA
8/21 NA
7/31 NA
57
7/16 NA
44 45
5/13 NA
4/22 NA
4/3 ~$220(1)
3/19 $2,083
3/13 $205
2015 2016 2017 2018 2019 3/7 ~$400(2)
2/12 $3,390
1/7 NA
Source: Pitchbook, 451 Research, press releases.
(1) Per The Real Deal New York Real Estate News.
(2) Per Skift News.
12Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
M&A BY CATEGORY
U.S. M&A Deals by Category from 2019
Buyer Target Buyer Target
46
Residential
/ Mortgage
44% 104 M&A deals 58
Commercial
56%
13Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
MOST ACTIVE ACQUIRERS IN REAL ESTATE TECHNOLOGY
Total # of
Deals
2017 2018 2019 (2017-2020 YTD)
19
(2020)
11
9
7
6
(2020)
5
Notes: Listed targets reflect publicly-announced transactions.
14I. PROPTECH MARKET SUMMARY
II. PUBLIC MARKETS
III. RESIDENTIAL REAL ESTATE TRENDS
IV. COMMERCIAL REAL ESTATE TRENDS
V. MORTGAGE & FINANCING TRENDS
VI. ADDITIONAL TRANSACTION CASE STUDIES
VII. M&A AND MARKET COMPS BACK-UP
VIII. GCA 2019 TRANSACTION CASE STUDIES
15Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
PUBLIC COMPANY PERFORMANCE
LTM Share Price Performance
FICO: 77% TRU: 52% EXPN: 38%
68% MCO: 62% EFX: 45%
53%
48% 51%
42%
37%
31%
28% 29%
8%
0%
(7%)
(12%) (7%)
(32%)
(52%)
Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Jan-20
RE Media / RE Data / RE Property Mgmt Traditional Commercial Credit / Mortgage RE Sharing Residential
Broader Data
Portals Software Software Mortgage / Title Brokerage Marketing Economy / Travel Brokerage
Public Real Estate Technology Ecosystem
Property
Broader Data RE Data Traditional Commercial Credit / Mortgage RE Sharing Residential
RE Media / Portals Management
/ RE Software Mortgage / Title Brokerage Marketing Economy / Travel Brokerage
Software
53% 51% 42% 37% 31% 29% 0% (7%) (7%)
LTM Share Price Performance
Source: Capital IQ as of 2/5/20.
16Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
PUBLIC COMPANY VALUATION
Enterprise Value / 2020E Revenue Enterprise Value / 2020E EBITDA
12.7x
23.1x
19.0x 19.0x 18.8x
7.5x
5.2x 11.9x
10.1x 9.1x
3.4x 3.2x 7.5x 7.2x
2.2x 2.0x
1.4x 1.1x
Property Credit / RE Sharing Traditional Property Credit / RE Sharing Traditional
RE Media / Broader RE Data / RE Residential Commercial RE Media / RE Data / Broader Commercial Residential
Mgmt Mortgage Economy / Mortgage Mgmt Mortgage Economy / Mortgage
Portals Data Software Brokerage Brokerage Portals RE Software Data Brokerage Brokerage
Software Marketing Travel / Title Software Marketing Travel / Title
Public Real Estate Technology Ecosystem
Property
Broader Data RE Data Traditional Commercial Credit / Mortgage RE Sharing Residential
RE Media / Portals Management
/ RE Software Mortgage / Title Brokerage Marketing Economy / Travel Brokerage
Software
7.5x / 18.8x 12.7x / 23.1x 3.2x / 19.0x 5.2x / 19.0x 1.4x / 7.2x 1.1x / 10.1x 3.4x / 11.9x 2.0x / 7.5x 2.2x / 9.1x
LTM Share Price Performance
Source: Capital IQ as of 2/5/20.
Multiples represent median value of sector group.
eXp World Holdings and Purplebricks Group excluded from Residential Brokerage’s EV / EBITDA calculation.
17I. PROPTECH MARKET SUMMARY
II. PUBLIC MARKETS
III. RESIDENTIAL REAL ESTATE TRENDS
IV. COMMERCIAL REAL ESTATE TRENDS
V. MORTGAGE & FINANCING TRENDS
VI. ADDITIONAL TRANSACTION CASE STUDIES
VII. M&A AND MARKET COMPS BACK-UP
VIII. GCA 2019 TRANSACTION CASE STUDIES
18Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
RESIDENTIAL REAL ESTATE TRENDS
RRE Themes Top 10 U.S. RRE Equity Rounds of 2019
($MM)
Latest
Select Reported
Theme 1: Growth of
Date Company Investor(s) Amt. Invested Funding to Date Valuation
iBuyers
7/30 $370 $1,513 $6,400
$1,345 Equity /
3/20 $300 $3,800
$3,000 Debt
Theme 2: RRE
enterprise software 10/15 $71 $81 $30
platforms expand via
M&A $150 Equity /
3/14 Undisclosed $70 $575
$825 Debt
$63 Equity / $119 Equity /
11/5 $498
$46 Debt $46 Debt
Theme 3: Customer
capture / 3/5 $48 $115 $355
qualification driving
multiple modes of
monetization 3/19 $45 $76 $135
1/22 Diana Nelson $45 $121 NA
Theme 4: Tech / $53 Equity /
hybrid brokerage 9/25 $43 $163
$120 Debt
models remain
attractive
11/19 Ken Griffin $40 $121 NA
19RRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 1: GROWTH OF IBUYERS
iBuyer Funding History ($MM) Select iBuyer Landscape
($MM)
$2,509
Founded /
Company Entered Funding ($MM) Current Markets
$1,345 Equity /
2014 21
$3,000 Debt
$150 Equity /
2015 15
$825 Debt
$61 Equity /
$1,613 2015 5
$394 Debt
2017 Mkt Cap: $9.3Bn 10
$1,254
2017 Mkt Cap: $2.0Bn 21
$425
2018 Mkt Cap: $1.1Bn 10
2018 iBuyer National Market Share (Purchases)(1)
$896
$298 $829
$250
$47
26%
2017 2018 2019
Equity Raise Value Debt Raise Value
71%
Source: Capital IQ as of 1/25/20, Pitchbook, press releases.
(1) Mike DelPrete 2019 iBuyer Report. 20RRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 1: GROWTH OF IBUYERS
Case Study: Zillow Continues Roll Out Of Its Offers Program
Offers Program Zillow 3-Year Stock Price Performance
− On April 12, 2018 Zillow (NasdaqGS: ZG) announced plans to expand its $70.00 7.0mm
“Offers” (iBuyer) program, following its launch in early 2017
$60.00 6.0mm
− Zillow’s iBuyer program is now active in Atlanta, Charlotte, Dallas, Denver,
Houston, Las Vegas, Phoenix, Raleigh and Riverside and has grown the $50.00 5.0mm
program to 21 markets, as of 2/5/2020
$40.00 4.0mm
− Zillow believes the iBuyer program represents a $1.8Tn TAM
$30.00 3.0mm
− In 2018, Zillow purchased 686 and sold 177 homes; the program
$20.00 2.0mm
accelerated in 2019, with 2,291 purchased and 1,211 sold homes in Q3
2019 alone; 2,822 homes are held in inventory as of November 7, 2019 $10.00 1.0mm
− Purchasing homes presents Zillow with an opportunity to enter into $0.00 0.0mm
adjacent markets such as mortgage / title
Offers Purchasing and Financing Offers Model
− Zillow will focus on single family homes Revenue (Selling price of homes)
priced between $200k - $300k
Less: Purchase price of homes
− Zillow will commit ~20% of the value of Less: Costs to purchase homes (commissions, escrow, title)
the home in equity, with the remaining
balance held as debt Less: Home improvement costs (including direct labor)
Gross Margin
− Zillow will work with lenders to create a
funding vehicle to finance these Less: Holding costs (insurance, taxes, HOA fees)
properties Less: Costs to sell homes (closing costs, commissions, escrow, title)
− Zillow assumes a 90-day holding period Less: Corporate overhead (indirect labor, marketing)
EBITDA
“Assuming an average transaction value of ~$260k Zillow can expect a net
operating profit of ~$7k (~3% margin)” (2)
Source: Capital IQ as of 1/24/20, press releases, public filings, Cowen Research, Susquehanna Financial Group, Pitchbook, company websites.
Cowen Research, 4/26/18. 21RRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 2: RRE ENTERPRISE SOFTWARE PLATFORMS EXPAND VIA M&A
Front-end Marketing & Sales Back-end Operations
Capture & nurture Convert & manage Ancillary components
Generate leads Manage transaction Accounting
leads leads (closing, title, etc.)
Manage data streams
Scaling RRE Enterprise
Software
22RRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 3: CUSTOMER CAPTURE / QUALIFICATION DRIVING MULTIPLE MODES OF MONETIZATION
Total Addressable Market ($Bn)
2018 existing home
2018 homeowners’ sales (NAR) *
+ renters’ insurance average home sales
industry revenue price (NAR) * 5.08% 2018 Origination
(IBIS World) commission rate Units (Mortgage
(Real Trends 2018 Bankers
$108
Average) Association) *
$4
Renters’ $9.7K revenue per
$87 loan (Compass
Point Research)
$64
$104 $19 2018 title industry
Homeowners’ Refinancing Borrell Associates revenue (IBIS
2019 World)
$46 $18
$17 $16
Purchase
(1) (2) (3) (4) (5)
Insurance Real Estate Brokerage Retail Mortgage Real Estate Internet, Media Title Insurance
Commission Origination & Tech
Source: 2018 Origination Units (Mortgage Bankers Association) * $9.7K revenue per loan (Compass Point
2018 homeowners’ + renters’ insurance industry revenue (IBIS World).
2018 existing home sales (NAR) * average home sales price (NAR) * 5.08% commission rate (Real
Research).
Borrell Associates 2019.
23
Trends 2018 Average). 2018 title industry revenue (IBIS World).RRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 3: CUSTOMER CAPTURE / QUALIFICATION DRIVING MULTIPLE MODES OF MONETIZATION
Case Study: HomeLight Raises $109MM in Series C Round (Equity + Debt)
Transaction Overview HomeLight Overview
Headquarters: San Francisco, CA
− On November 5, HomeLight announced that Founded: 2012
it had raised $63MM in equity led by Zeev
Description: Operator of a real estate platform that aims to simplify the
Ventures with participation from Group 11,
transaction process for homebuyers and sellers. HomeLight
Menlo Ventures, Crosslink Capital, Stereo provides software and services to home buyers, sellers and real
Series C Capital and others as well as secured $46MM estate agents, such as HomeLight Agent Matching, the investor
in debt financing matching platform Simple Sale, HomeLight Home Loans, and
HomeLight Closing Services
− This brings the company’s total funding to
~$165MM to date (including debt) Current Investors:
− HomeLight plans to use its new funding to
$109MM Raised expand its capabilities, including agent
matching, title, escrow and mortgage
services
Product Overview
HomeLight Fundraising Timeline
Agent Matching ($MM) Seed Seed Series A Series B Series C
Analyzes millions of real estate transactions and agents to refer buyers and sellers to Date NA 8/26/14 4/18/16 8/15/17 11/5/19
70,000+ in-network real estate agents based on customizable metrics
Equity Raised $0.4 $4.5 $10.4 $40.0 $63.0
Debt Raised $0.0 $0.0 $0.6 $0.0 $46.0
HomeLight Home Estimates Home Loans Total Raised to Date $0.4 $4.9 $15.9 $55.9 $164.9
Simple Sale
Taps into a network of Customers pair answers Apply in as little as 30 Select Deal Commentary
150+ pre-approved cash to a few questions with minutes and HomeLight
buyers who compete to
buy homes.
housing market data
from multiple trusted
Home Loans will
underwrite customers “estate
HomeLight's evolution from a single-product company to a real
platform aligns with our vision for the future of real estate. I
The service is free to sources and HomeLight within 1 business day
sellers with no then predicts the home’s before an offer is made. am thrilled to partner with HomeLight to build the real estate
obligation to accept,
and sellers receive
current value Once approved,
HomeLight guarantees
platform and power the real estate transaction of the future. ”
offers within 2 minutes a 21-day closing table Oren Zeev, Managing Director,
Zeev Ventures
Source: Pitchbook, Company website, press releases.
24RRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 3: CUSTOMER CAPTURE / QUALIFICATION DRIVING MULTIPLE MODES OF MONETIZATION
Company Profile: OJO Home
OJO Home Overview OJO Home Highlights
Headquarters: Austin, TX
Founded: 2015 Currently serves 100 Million 2019
Description: Developer and operator of an AI-enabled personal assistant for 12 U.S. Property Records,
Winner of HousingWire
Covering 99% of U.S.
realtors and homebuyers that curates properties based on Markets MLSs in U.S. & Canada
HW Tech100 Award
buyers’ preferences and connects them with qualified real estate
agents. The Company offers a platform for agents to find clients
and engage them with personalized insights
Acquisition Timeline
Current Investors:
Oct Provider of a real estate agent software platform, offering
2019 custom websites, CRM and ai-driven collaborative home search
Oct Provider of real estate websites with lead capture capabilities,
2018 MLS data services and property search tools
OJO Home Fundraising Timeline ($MM) Product Overview
New Funding
$71 Find a Home
• AI engine intuitively processes a wide range of homebuyer preferences
and highlights relevant properties in the market
• Buyers can speak with the built-in chatbot to ask questions on properties
as if they were asking a knowledgeable real estate agent
$45
Connect with an Agent
• OJO connects homebuyers with qualified local real estate agents
• Agents can leverage OJO’s analytics insights on their clients’ preferences
and financial situations to tailor their recommendations
$26 • Agents can also communicate with clients via the OJO app
$21 Partnerships & Integrations
$6
$6
Jan-16 May-18 Mar-19
Source: Company website, Pitchbook, press releases.
25I. PROPTECH MARKET SUMMARY
II. PUBLIC MARKETS
III. RESIDENTIAL REAL ESTATE TRENDS
IV. COMMERCIAL REAL ESTATE TRENDS
V. MORTGAGE & FINANCING TRENDS
VI. ADDITIONAL TRANSACTION CASE STUDIES
VII. M&A AND MARKET COMPS BACK-UP
VIII. GCA 2019 TRANSACTION CASE STUDIES
26Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
COMMERCIAL REAL ESTATE TRENDS
CRE Themes Top 10 U.S. CRE Equity Rounds of 2019
($MM)
Latest
Select Reported
Theme 1: Data drives
Date Company Investor(s) Amt. Invested Funding to Date Valuation
valuation in CRE
8/21 $400 $565 $1,000
10/29 $319 $527 >$1,000
Theme 2: Expansion /
investment behind 7/12 $225 $358 $1,100
software productivity
platforms
2/20 $200 $297 NA
4/18 $160 $185 $240(1)
Theme 3: M&A rollup 5/14 $123 $468 $2,100
strategies in building
operations
6/3 $115 $123 $220
1/16 $100 $140 NA
Theme 4: Highly
active shared space / 5/7 $90 $178 $1,000
marketplace
category
8/22 $80 $222 NA
Source:
(1) Estimated post-money valuation per Pitchbook. 27CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 1: DATA DRIVES VALUATION IN CRE
Case Study: Reonomy Raises $60MM in Series D Round
Transaction Overview Reonomy Overview
− On November 7, Reonomy announced that it Headquarters: New York, NY
had raised a total of $60MM in its Series D
Founded: 2013
round led by Georgian Partners with
participation from new investors Wells Fargo Description: Developer of a commercial real estate (CRE) data and analytics
platform. Reonomy leverages big data, machine learning and
Strategic Capital, Citi Ventures and Untitled
partnerships to integrate the fragmented, disparate world of
Series D Investments and existing investors including
commercial real estate
Bain Capital Ventures, Primary Venture
Partners and Sapphire Ventures Current Investors:
− This brings the company’s total funding to
~$128MM to date
− Reonomy plans to use its new funding to
$60MM Raised
expand its machine learning capabilities and
platform-driven applications and accelerate
its international expansion Reonomy Fundraising Timeline
Product Overview
($MM) Seed Series A Series B Debt Series C Series C-II Series D
Data Network Date 3/1/13 3/10/14 1/2/15 4/14/15 2/6/18 6/13/18 11/7/19
• Aggregates data from an unprecedented network of providers, including
Equity Raised $1.5 $3.7 $13.0 $0.0 $16.0 $30.0 $60.0
all 3,100 local county assessors in the U.S., secretaries of state, census
data, title companies, and commercial data & geospatial providers Debt Raised $0.0 $0.0 $0.0 $4.0 $0.0 $0.0 $0.0
Total Raised to Date $1.5 $5.2 $18.2 $22.2 $38.2 $68.2 $128.2
AI: Machine Learning
• Machine learning algorithms take data from any source and restructure it Select Deal Commentary
using Reonomy’s own universal language: the Reonomy ID
• The platform leverages artificial intelligence to provide predictive
analytics
“resolve
Reonomy has developed a powerful platform to integrate and
sources of commercial real estate data into a single, unique
• After 6 years in market, the algorithms have been trained on billions of
unique data points and feedback from thousands of users identifier for every CRE asset in the United States. This unique
identifier is being leveraged by some of the largest enterprises in the
Partners world to tie together their public, proprietary, and third party data
sources and to create a level of visibility into real estate assets that
was previously unattainable. ”
Exclusive Data Access Agreements Emily Walsh, Principal, Georgian
Partners
Source: CB Insights, Pitchbook, Company website, press releases.
28CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 1: DATA DRIVES VALUATION IN CRE
Case Study: CoStar Group Acquires STR
Transaction Overview CoStar Group Financial Detail(2)
Revenues Adj. EBITDA
$1,677
− On October 1, CoStar Group announced its CAGR:
plan to acquire STR, one of the country’s 19%
$1,389
largest hotel data aggregators. The
transaction closed on October 22 $1,192
− The all-cash deal for STR was valued at $450 $965
To be acquired by million, ~7.0x EV / 2019E Revenue and $838
~28.1x EV / 2019E EBITDA
$499 $535
− The acquisition will allow CoStar to expand $418 CAGR:
their office and industrial property database $280 20%
$256
to include hotel data(1)
CY16A CY17A CY18A CY19E CY20E
CoStar Group 3-Year Stock Price Performance & Select Acquisition History
$800.00 2.0mm
October 1, 2019
$700.00 1.8mm
July 18, 2017
1.6mm
$600.00 October 12, 2018
1.4mm
$500.00 September 12, 2017 1.2mm
March 10, 2017
$400.00 1.0mm
June 20, 2019 0.8mm
$300.00
0.6mm
$200.00 November 8, 2018
0.4mm
$100.00 0.2mm
$0.00 0.0mm
Nov-17
Nov-18
Nov-19
May-17
May-18
May-19
Sep-17
Sep-18
Sep-19
Jan-17
Jul-17
Jul-19
Jan-20
Jan-18
Jul-18
Jan-19
Mar-17
Mar-18
Mar-19
Source: Capital IQ as of 1/25/20, Company website, press releases.
(1) Commercial Observer, 10/1/19.
(2) Projected figures per Wall Street research consensus.
29CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 1: DATA DRIVES VALUATION IN CRE
Case Study: CoStar Group Acquires STR
Strategic Rationale
STR will complement CoStar’s existing offerings and empower CoStar
to provide valuable new services to investors and service providers in the
STR has become the gold Founded in 1987, CoStar hospitality industry
standard in the global conducts expansive, ongoing
hospitality industry for premium research to produce and The combination of the two companies’ offerings will allow CoStar to
data analytics, performance maintain the largest and most create valuable new and improved tools for investors, lenders, and service
benchmarking and market comprehensive database of providers for use in developing, financing, valuing, and selling hotel
insights having grown its data commercial real estate properties
assets, product offerings and information.
CoStar will focus on a number of attractive growth areas, including creating
geographic reach over the past
powerful hotel data and analytics in CoStar Suite, driving international
34 years. penetration, building and selling new products and expanding benchmarking
to other areas
STR Highlights Select Transaction Commentary
Aggregates data from over
Aggregates data from nearly “reputation
STR brings an unrivaled
within the global
“become
We are very excited to
part of CoStar. CoStar
nine million guest rooms in
65,000 hotels worldwide hospitality industry for their brings leading technologies,
over 180 countries
data integrity, reliability and analytics and sales capabilities
strict confidentiality, and we that we believe will enable STR
look forward to continuing to to accelerate growth and
Distributes more than 1.2 370 employees in 15 build on these core values in increase the value and insights
million reports each month countries “
the next chapter of STR’s
“
we provide to our hospitality
growth. clients.
Provides building Andrew Florance, Amanda Hite,
information on 80,000 Founder and CEO, President and CEO,
hotels CoStar Group STR
Source: Company websites, press releases.
30CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 1: DATA DRIVES VALUATION IN CRE
Case Study: Real Capital Analytics Raises $115MM in Debt and Equity for Recap & Expansion
Transaction Overview RCA Overview
Headquarters: New York, NY
− On June 3, Real Capital Analytics (RCA) Founded: 2000
announced that it had received growth
Description: Provider of commercial real estate market data and analytics. The
funding from Susquehanna Growth Equity
Company offers a database of commercial real estate
(SGE) in a combination of cash and debt transactions, property sales, recapitalization and refinancing
PE Growth totaling $115MM across markets and property types, enabling investors, lenders,
brokers and advisors to get comprehensive data and unique
− The investment valued the Company at
insight to formulate investment strategy, assess risk, source new
~$220MM
opportunities and execute transactions
− $89MM will be used to purchase Daily Mail Current Investors:
and General Trust’s 40% stake acquired in
$115MM Invested 2007
− RCA plans to use the remaining $26MM for
investments in overseas CRE data firms
RCA Fundraising Timeline
RCA Highlights
($MM) Series A Recapitalization / PE Growth
Current Investments Market-Leading Position Date 1/1/07 6/3/19
2015 200,000 Amount Raised $7.5 NA
Investors Profiled Post-Money
Indian commercial real estate data and $18.8 ~$220
Valuation
analytics provider
$18Tr Select Deal Commentary
2017 Total recorded
Dutch commercial real estate data and
transaction value “that
My team and I are confident
SGE will provide
“White
We’ve gotten to know Bob
and the RCA team over
analytics provider tracking over 400,000 172 tremendous support, expertise
“ the last decade and could not
buildings Countries Tracked and financial flexibility to RCA. be more excited to support
RCA as it continues to
2018 / 2016 “
transform the commercial real
Commercial real estate data and analytics
100% estate industry.
provider for U.S. and Latin American Penetration with Scott Feldman, MD,
top CRE brokers Bob White, Founder &
properties SGE
CEO, RCA
Source: Pitchbook, Company website, news reports, press releases.
31CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 2: EXPANSION / INVESTMENT BEHIND SOFTWARE PRODUCTIVITY PLATFORMS
Case Study: LightBox – Building a Leading CRE Platform
▪ LightBox has assembled a leading end-to-end commercial real estate technology platform:
− Acquired four companies since April 2018, that collectively create one of the largest tech players in the CRE market
− Platform built to service all constituents in the CRE transaction: brokers, lenders, commercial services firms, investors and CRE
transaction service providers
Database of environmental
records and land use
information / underwriting &
Customer relationship
due diligence platform
management software
The world’s largest online commercial real estate Cloud-based real
designed to organize
transaction marketplace, SaaS transaction management estate data, analytics
contacts and track
and business intelligence platform and GIS solutions Real estate appraisal
properties
management software
Market Data / Appraisal /
Broker
Transaction Transaction Transaction Investor Analytics / Underwriting
CRM Business
Marketing Marketplace Workflow Portal Geospatial Data /
Intelligence
Solutions Services
Sale / Purchase Due Risk Data
Applications Transactions
Leasing Lending Refinancing
Diligence
Auctions
Mitigation Licensing
Valuation
Commercial Capital Government Environmental
Customers Services Firms
Investors Lenders Appraisers
Markets
Developers
Planners
Builders
Firms
32CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 2: EXPANSION / INVESTMENT BEHIND SOFTWARE PRODUCTIVITY PLATFORMS
Case Study: Juniper Square Raises $75MM in Series C Round
Transaction Overview Juniper Square Overview
Headquarters: San Francisco, CA
− On November 21, Juniper Square announced Founded: 2014
that it had raised a total of $75MM in its
Description: Provides a software platform that streamlines fundraising,
Series C round led by Redpoint Ventures with investment operations and investor reporting for the commercial
participation from Felicis Ventures, Ribbit real estate industry. The system is used by hundreds of
Series C Capital and Zigg Capital investment sponsors to manage nearly $800B in real estate
investments (5% of total U.S. CRE market capitalization). The
− This brings the Company’s total funding to
Company aims to bring public equities market-like transparency
~$108MM to date and ease of transactions to commercial real estate
− Juniper Square plans to use the new funding Current Investors:
to continue to expand its headcount, capital
$75MM Raised markets operations and overall scope of
business
Product Overview Select Clients
Juniper Square Fundraising Timeline
Database for current and prospective
CRM ($MM) Early Stage VC Series A Series B Series C
investors and other business contacts
Date 1/6/16 1/31/18 12/12/18 11/21/19
Equity Raised $1.9 $6.0 $25.0 $75.0
Target clients and prospects, organize
Fundraising Total Raised to Date $1.9 $7.9 $32.9 $107.9
and track fundraising and securely
Automation
distribute offering documents
Select Deal Commentary
Manage investment ownership / cap
Partnership
Accounting tables and investor records “markets
At Redpoint, we look for visionary founders who can create new
or redefine existing ones – and that’s Alex and Juniper
Square. To succeed in commercial real estate, you need the trust
Customizable capital account
Investor
statements, transaction notices and of key players, and to win that trust, you need industry context,
Reporting
other investor reports which Alex and his team have in droves to complement their
software expertise. ”
Secure access to documents and
Investor Portal Elliot Geidt, Partner, Redpoint
investment performance in the cloud
Source: Pitchbook, Company website, press releases.
33CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 3: M&A ROLLUP STRATEGIES IN BUILDING OPERATIONS
Company Profile: BuildingEngines
Building Engines Overview Building Engines Highlights
Headquarters: Boston, MA
Founded: 2000
Description: Provider of a building operations software suite, offering SaaS
750 25,000+ 2.4M+
web and mobile portfolio management platforms. The Company’s Clients Buildings Managed Sq. Ft. Managed
products streamline operations by connecting commercial real
estate stakeholders on a unified platform, automating workflows
and delivering data and insights for property owners and Products and Solutions
managers. Its suite of solutions supports the full range of critical
building operations, including tenant engagement and service, Tenant Service • Work order communication &
maintenance management, communications, task and • Tenant information /
scheduling
operational risk management. • Resource / amenity
payment portal
scheduling
Current Investors: • Tenant survey tools
Maintenance • Vendor portal
Wellfleet Capital • Space visualization
• Preventative maintenance
Partners • RFP automation
scheduling
• Inspection organization tools
Management • Visitor access
Risk Management
• Fire & life safety management
Tim Curran CEO David O’Connor CFO • Insurance certification
• Incident tracking
Daniel Cozza Chief Product Officer Lou Jordano CMO
Nina Laven Chief People Officer • Mobile tenant center
Communications
• Tenant support chatbot AI
• Property websites
Acquisition Timeline • Broadcast messaging
Nov Provider of a property management RFP automation platform
2019 that simplifies RFP generation, scheduling and coordination Fundraising Timeline ($MM)
New investment Existing Funding $39
Provider of software solutions and managed services for
May
commercial real estate, such as space management software, $27 $13
2019
building compliance and acquisition and disposition services
Provider of a facility management software for large
May $27
commercial buildings and other properties, such as stadiums,
2018
that tracks building operations and customer experience data
Source: Source: Capital IQ as of 1/25/20, Company website, press releases.
Oct-16 Oct-19
34CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 4: HIGHLY ACTIVE SHARED SPACE / MARKETPLACE CATEGORY
Case Study: Vacasa Raises $319MM in Series C Round
Transaction Overview Vacasa Overview
Headquarters: Portland, OR
− On October 29, Vacasa announced that it had Founded: 2009
raised a total of $319MM in its Series C
CEO & Founder: Eric Breon
round led by Silver Lake with participation
from Riverwood Capital, Level Equity and Employees: ~3,300
Series C NewSpring Description: Publishes clients’ property listings on top hotel & rental platforms
and hires local housekeepers and property managers. The end-to-
− This brings the company’s total funding to end vacation rental service aims to provide optimal financial
~$530MM to date and brings its valuation to returns for owners and streamline the booking process for guests
over $1Bn
Current Investors:
− Vacasa plans to further enhance its industry-
$319MM Raised leading technology platform, accelerate
expansion into new markets and grow new
offerings Vacasa Fundraising Timeline
Vacasa Highlights ($MM) Series A Series B-I Series B-II Series C
Date 11/14/16 10/17/17 10/18/18 10/29/19
Amount Raised $45.0 $103.5 $64.0 $319.0
Raised to Date $45.0 $148.5 $212.5 $531.5
3,300+ 2MM+ 17+ 23,000+
Guests per Vacasa Select Deal Commentary
Employees Countries
Year Homes
“become
[Vacasa] has the potential to
a global brand that
“almost
Vacasa’s revenue has grown
seven-fold since our
Booking Partners stands for superior financial Series A investment nearly
returns for homeowners and four years ago, and we
exceptional experiences for expect growth to accelerate
guests.” in 2020. ”
Joerg Adams,
Ben Levin, Founder,
Managing Director,
Level Equity
Silver Lake
Source: Pitchbook, Company website, press releases.
35CRE Trends Theme 1 Theme 2 Theme 3 Theme 4
THEME 4: HIGHLY ACTIVE SHARED SPACE / MARKETPLACE CATEGORY
Case Study: Vacasa Raises $319MM in Series C Round
Product Summary
Rental Income Estimator Rental Listings Marketing Support Property Management
• Provides rental income estimator • Builds customers’ listings with a 3D • Provides marketing support through • Vacasa homes are cared for by local
tools, leveraging its industry-leading virtual tour and high-quality HD interior design consultations and staff, including housekeepers and a
database of rental histories of its photography professional photography shoots local property manager
23,000 homes under management to • Listings will be prominently featured • Digital marketing specialists ensure • Provides 24/7 support from Vacasa’s
automate pricing on Airbnb, Vrbo, HomeAway, Vacasa homes are highly visible with reservations and customer service
• Informed by factors such as weather, Booking.com, etc. targeted multi-channel campaigns teams
local events and historic trends, rates across search engines, display • Implements guest screening and
update multiple times per day advertising, social media and email liability protection
Ancillary Real Estate Buy a Vacation Sell a Vacation Industry
Functions: Agent Network Home Home Insights
Number of Properties Recent Acquisition & Ownership Timeline
25,000 Jul $162 million deal expands Vacasa’s portfolio to more than
20,000 2019 23,000 vacation homes around the globe
15,000
Jun Take over the management of its 85 properties in Seattle,
10,000 2019 Stevens Pass, and Leavenworth, Washington
5,000
Apr
0 Added 450 units in destinations along the Florida Gulf Coast
2019
Apr-16
Apr-19
Dec-14
Dec-18
Mar-18
Nov-16
Nov-17
Feb-17
Sep-17
Oct-15
Oct-16
Oct-18
Oct-19
Jul-16
Jul-17
Jul-18
Jul-19
Aug-14
Mar Added 12 properties in New Orleans and partners with all the
2019 major booking channels (Airbnb, Booking.com, etc.)
Portfolio increase from the Wyndham Vacation Rentals acquisition
Source: Pitchbook, Company website, press releases.
36I. PROPTECH MARKET SUMMARY
II. PUBLIC MARKETS
III. RESIDENTIAL REAL ESTATE TRENDS
IV. COMMERCIAL REAL ESTATE TRENDS
V. MORTGAGE & FINANCING TRENDS
VI. ADDITIONAL TRANSACTION CASE STUDIES
VII. M&A AND MARKET COMPS BACK-UP
VIII. GCA 2019 TRANSACTION CASE STUDIES
37Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix
MORTGAGE / INSURANCE / FINANCING TRENDS
Mortgage / Insurance / Financing Themes Top 10 U.S. Mortgage / Insurance / Financing Equity Rounds of 2019
($MM)
Theme 1: Alternative
Latest
financing products
Select Reported
going strong Date Company Investor(s) Amt. Invested Funding to Date Valuation
4/11 $300 $480 $2,000
Theme 2: Closing /
6/24 $130 $310 NA
title software raising
significant capital in
2019 12/5 $103 $225(2) $1,200
12/11 $100 $115 NA
Theme 3: Customer
7/24 $100 $210 $1,000
capture platforms
1/31 $75 $254 $885
Mortgage Originations(1)
8/19 $65 $254 $885
$2,052 $2,068
$1,914
$1,760 $1,676 2/27 $65 $225(2) $1,200
$796 $609
$1,026 $467
$704
10/28 $60 $111 $330
$1,209 $1,272 $1,305
$1,026 $1,056 1/29 $58 $115 $155
2016A 2017A 2018A 2019E 2020E
New Purchase Volume ($Bn) Refi Volume ($Bn)
Source:
(1) MBA Mortgage Bankers Association, 12/13/19.
(2) Per FinSMEs report.
38Financing Trends Theme 1 Theme 2 Theme 3
THEME 1: ALTERNATIVE FINANCING PRODUCTS GOING STRONG
Alternative Financing Funding History ($MM) Select Alternative Financing Landscape
($MM)
$1,683
Founded
Company / Entered Funding ($MM) Description
Provides cash offers to purchase a
$54 Equity /
2018 new home, leasing it to the buyer
$505 Debt until the buyer's old home sells
Provides financing and debt
$223 Equity / consolidation underwritten by
2018 home equity as well as home sale-
$1,015 Debt
leaseback options
Provides home co-investing,
$1,503 2004 $40
allowing buyers to purchase homes
with smaller down payments and
homeowners to sell equity
Purchases houses on behalf of
homebuyers and offers financing to
2018 $36 buy back the property, allowing
purchases with no down payment
$451
Equips homebuyers with pre-
$115 $49 Equity / approved cash offers as well as
2015 assistance with home inspection
$104 Debt
and valuation
$336
$23 Equity / Provides home sale-leaseback
$14 $180 2016 financing services
$303 Debt
2017 2018 2019
Purchases home equity and
2017 $115 provides cash upfront, using funds
from accredited investors
Equity Raise Value Debt Raise Value
39Financing Trends Theme 1 Theme 2 Theme 3
THEME 1: ALTERNATIVE FINANCING PRODUCTS GOING STRONG
Case Study: Ribbon Raises $330MM in Series B Round (Equity + Debt)
Transaction Overview Ribbon Overview
Headquarters: New York, NY
− On October 29, Ribbon announced that it Founded: 2017
had raised $30MM in equity led by Greylock
Description: A financial technology company that works with lenders and local
as well as secured $300MM in a debt facility
realtors to help homeowners buy a new home before they sell
from Goldman Sachs their existing home by upgrading customers’ offers to cash and
Series B removing financing contingencies
− The $300MM debt facility includes an option
to be increased by an additional $220MM Current Investors:
− This brings the company’s total funding to
~$559MM(1) to date (including debt)
− Ribbon plans to use its new funding to Ribbon Fundraising Timeline
$330MM Raised facilitate the company’s expansion into new
markets and accelerate product ($MM) Seed Series A (2) Series B
development efforts Date 10/18/17 10/25/18 10/29/19
Product Overview Equity Raised $4.0 $20.0 $30.0
Debt Raised $0.0 $205.0 $300.0
Ribbon Buyers sort out Total Raised to Date $4.0 $229.0 $559.0
Buyer finds a Close in as little
upgrades offer financing over
home as 14 days
to cash 180 days
For Buyers Select Transaction Commentary
• Pre-approves and upgrades customers’ offers to cash within 24 hours
• Makes customers more competitive in the market, makes their purchase
more affordable and provides them with certainty of moving into their
“theSince leading the seed round,
Ribbon team hasn't slowed
“technology
Ribbon is proving that superior
and data plus capital
new home on time by removing every contingency except inspection down when it comes to is what it will take to truly
For Agents innovating, and Greylock is transform the real estate
• Step in to reserve customers’ homes if realtors need time to get their thrilled to continue our support industry. As Ribbon continues to
mortgage documentation and approvals in place
as the company builds new, expand across the U.S., buyers
“
• Both buying and listing agents earn full commission and get access to
tools like free valuations and a personal account manager transformative technology for the and sellers are the real winners.
“
real estate industry and expands
For Lenders into more markets.
• Enables lenders to fund more offers
• Increases pull-through rate
• Tracks all buyers in one place
Josh McFarland, Pete Flint, Managing
Partner, Greylock Partner, NFX
Source: Pitchbook, Company website, press releases.
(1) Including $505MM of known debt.
(2) Equity / debt split estimate per Pitchbook.
40Financing Trends Theme 1 Theme 2 Theme 3
THEME 2: CLOSING / TITLE SOFTWARE RAISING SIGNIFICANT CAPITAL IN 2019
Case Study: Qualia Raises $55MM in Series C Round
Transaction Overview Qualia Overview
Headquarters: San Francisco, CA
− On November 13, Qualia announced that it Founded: 2015
had raised a total of $55MM in its Series C
Description: Developer of a digital real estate closing platform for homebuyers
round led by Tiger Global, with participation and sellers, title and escrow agents, underwriters and lenders,
from existing investors Bienville Capital, 8VC that provides connectivity between stakeholders to streamline
Series C and Menlo Ventures the home closing experience. The Company also offers various
business tools for title and escrow agency operations
− This brings the Company’s total funding to
~$95MM to date Current Investors:
− Qualia plans to use the new funding to
expand its product, engineering and go-to-
$55MM Raised market teams, with a focus on accelerating
growth and building strategic partnerships
Product Overview Qualia Fundraising Timeline
(1)
Product Summary Market-Leading Position ($MM) Series A Series B Series C
Date 10/13/15 10/1/18 11/13/19
Qualia Title & Escrow Platform
Equity Raised $7.2 $33.0 $55.0
• Workflow, accounting and 15% 6,000+
reporting platform for title and of U.S. real estate templated
Total Raised to Date $7.2 $40.2 $95.2
escrow agents transactions are documents pre-
Assure E-Remittance & Audit powered by loaded for
• Title agency management suite Qualia’s platform closings Select Deal Commentary
with revenue, auditing and
reporting capabilities “remains
The workflow for most residential real estate transactions
antiquated and opaque. Qualia has created a modern
Connect Secure Closing Portal
• Consumer interface that
200,000+ 2-4x system of record, communication, and action for title insurance
consolidates all closing functions, title and escrow more transactions
agents, lenders closed by title and agents and mortgage originators and we believe their software
vendors and workstreams
Marketplace Closing Services
and realtors use
Qualia
escrow agents a
month using
platform materially improves productivity and reduces costs. ”
• Vendor marketplace for mortgage Qualia
release tracking, title search,
notary, survey and other services Scott Shleifer, Partner, Tiger Global
Source: Pitchbook, Company website, press releases.
(1) Figures as of 1/24/20 . 41Financing Trends Theme 1 Theme 2 Theme 3
THEME 2: CLOSING / TITLE SOFTWARE RAISING SIGNIFICANT CAPITAL IN 2019
Case Study: Notarize Raises $17MM in Series B-II Round
Transaction Overview Notarize Overview
Headquarters: Boston, MA
− On September 4, 2019, Notarize announced Founded: 2015
that it had raised $17MM in its series B-II
CEO: Patrick Kinsel
round of funding from a group of investors
including Polaris Partners, Lennar, Description: Provider of a document management platform oriented towards
the real estate industry, allowing consumers and enterprises such
Series B-II Hyperplane Venture Capital, Realogy
as lenders, insurers, and title agents to sign and notarize
Holdings and Second Century Ventures. This
documents online
follows the company’s $20MM Series B-I
raise announced on April 20, 2018 Current Investors:
− This brings the company’s total funding to
$48 million
$17MM Invested
− Notarize plans to use the proceeds to
integrate with additional lending partners
and continue to develop their products Notarize Fundraising Timeline
Notarize Highlights
($MM) Seed Series A Series B-I Series B-II
Legally Sign & Subscription and Date 5/15/15 7/5/16 4/20/19 9/4/19
Notarize Documents Available 24/7 Per-Notarization Amount Raised $2.5 $8.5 $20.0 $17.0
100% Online pricing plans Raised to Date $2.5 $11.0 $31.0 $48.0
Notarize Products Select Deal Commentary
eSign
• Electronically sign any document “creating
Notarize’s online closing process aligns with Lennar’s vision of
a seamless digital transaction. We are excited to provide a
• Free service
new resource that will improve the home buying experience and
Online Notarization
• Connect with a commissioned notary public 24x7 to sign and notarize
enable our customers to move into their dream homes faster. ”
documents from any device
Bruce Gross, CEO, Lennar Financial
Real Estate Closings Services
• Signers can electronically review, sign and notarize real estate documents
• Connects the entire mortgage industry on one platform
Source: Pitchbook, Company website, press releases.
42Financing Trends Theme 1 Theme 2 Theme 3
THEME 2: CLOSING / TITLE SOFTWARE RAISING SIGNIFICANT CAPITAL IN 2019
Case Study: Blend Raises $130MM in Series E Round
Transaction Overview Blend Overview
Headquarters: San Francisco, CA
− On June 24, Blend announced that it had Founded: 2012
raised $130 million in its series E round of
Description: Developer of a digital lending platform intended to simplify and
funding led by General Atlantic and Temasek
fasten consumer finance processes. The company's machine-
that also included 8VC, Founders Fund, learning based platform uses verified source data to build a
Series E Greylock Partners and Lightspeed Venture consumer's complete financial profile, automates third-party
Partners verification to reduce frauds, identifies delay-causing issues and
manages the tasks needed to close a loan.
− The investment puts Blend’s total equity
raised at $310MM Current Investors:
− Blend plans to use the money to grow its
$130MM Invested team, seek new partnerships, develop new
technology and expand its offering into a
broader suite of consumer lending products
Blend Fundraising Timeline
Blend Highlights
($MM) Series A Series B Series B1 Series C Series D Series D1 Series E
Customers Product Summary Date 6/22/12 10/2/14 7/14/15 12/18/15 8/24/17 3/27/18 6/24/19
Mortgage
Amount Raised $6.1 $11.0 $10.0 $38.0 $100.0 $15.0 $130.0
Capabilities:
₋ Application Portal/Processing Raised to Date $6.1 $17.1 $27.1 $65.1 $165.1 $180.1 $310.1
₋ CRM Post-Money (1)
$20.1 $61.0 $100.0 $270.0 $500.0 $600.0 NA
₋ Data Management Valuation
Third-Party Integrations:
₋ LOS Select Deal Commentary
₋ Lead Generation
₋ Credit
₋ Price Engine
“clear
In our conversations with investors over the past few months, it was
that there is an appetite to understand and drive the future of
₋ Processing & Underwriting technology in financial services—and Blend is at the forefront.
Financial institutions, and lenders specifically, are under increasing
Powers $1B+ in loans per day pressure from consumers to deliver a top-notch digital, intuitive, and
with 150+ lending institutions
Deposit Digital Lending Home
satisfying experience. Blend’s lending platform can deliver all three. ”
Accounts Platform Equity Marc Greenberg, Head of Finance, Blend
Source: Pitchbook, Company website.
(1) Pitchbook estimate. 43Financing Trends Theme 1 Theme 2 Theme 3
THEME 3: CUSTOMER CAPTURE PLATFORMS
Case Study: Total Expert Raises $52MM in Series C Round
Transaction Overview Total Expert Overview
Headquarters: St. Louis Park, MN
− On October 24, Total Expert announced that Founded: 2012
it had raised a total of $52MM in its Series C
CEO & Founder: Joe Welu
round
Description: Developer of an enterprise-grade marketing operating system
− This brings the company’s total funding to designed for regulated financial services organizations. The
Series C
$86MM to date platform enables customer facing teams, marketing and
compliance to work together to deliver marketing campaigns
− Total Expert plans to use the proceeds to
expand on its current team of 218 Current Investors:
employees, hiring additional data scientists,
designers and industry experts, in addition to
$52MM Raised accelerating the development of its APIs, Total Expert Fundraising Timeline
machine learning and AI capabilities
($MM) Seed Angel Series A Series A-ISeries A-II Series B Series C
Date 12/12/14 NA 4/12/16 2/15/17 10/31/17 10/11/18 10/24/19
Product Summary Amount Raised $0.5 $0.9 $3.0 $3.0 $6.0 $20.8 $52.0
Raised to Date $0.5 $1.4 $4.4 $7.4 $13.4 $34.2 $86.2
Marketing Sales
• Conduct unified, automated • Leverage historical client valuations Select Customers
marketing campaigns across and business data to extract
channels including email, social insights and maximize lead
media, SMS and more conversion
• Intelligent automation using CRM • Seamlessly manage client relations Select Deal Commentary
data optimizes targeting strategies across the organization through a
CRM purpose-built platform for the
financial industry “building
We are incredibly excited about Total Expert’s approach to
trust and maximizing the long-term value of relationships
between consumers and lenders. The future of consumer finance is
engaging across all product and customer needs during their
Open Architecture Compliance financial life, and Total Expert is the category leader powering this
• API allows for integration into • Audit-ready humanized automation and compliance at scale. ”
existing tech stack and seamless record
extension keeping Simon Chong, Managing Partner &
Cofounder, Georgian Partners
Source: Pitchbook, Company website, press releases.
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