Real estate fintech has no shortage of funds flooding the market. Start-ups like Flyhome, Homeward, and Divvy have all successfully raised millions over the last few months. And now, California-based start-up Reali can be added to that list.
The company -- which helps simplify the homebuying and selling processes through their cash offers and trade-in program -- just successfully raised $250 million to expand its current services.
Expansion is on the horizon
The Series B raise was led by Zeev Ventures and received participation from Akkadian Ventures and Signia Ventures. In total, it raised $75 million in equity, $25 million in venture debt, and $150 million in warehouse financing. Since the company's inception in 2017, it's raised over $300 million.
Right now, Reali only operates in six markets in California: San Francisco Bay, Orange County, Sacramento, Long Beach, San Gabriel Valley, and Inland California. The latest raise will help the company expand into new markets and have more capital to back its flagship trade-in and cash-offer programs.
Like other fintech start-ups, Reali has a cash-offer program that allows homebuyers to use Reali's purchasing power to bring an all-cash offer to the table. This has been crucial in helping buyers stand out over the past year and a half in the highly competitive California market (and beyond).
The company's trade-in program helps alleviate the stress of trying to buy and sell a home simultaneously. Homebuyers can use Reali cash to purchase their new, second home while their original home is staged and listed for sale. Typically, this not only helps homes sell faster and for more but also allows homebuyers' offers to purchase new homes stand out by eliminating any sale contingencies.
Reali's has already added to its services over the past few years, now offering in-house and partner-based mortgage, title, and closing services that help provide homebuyers a full range of services.
How it impacts real estate investors
Unlike iBuying, which provides an instant cash offer on properties, including homes in poor condition, Reali's services aren't necessarily competing with investors. Since the company's target client is a homebuyer preparing to list for a traditional sale, the impact is being felt by real estate agents more than investors. And that is a sigh of relief as iBuying ramps up and rising prices push real estate profits out the door for many markets.
But Reali's model is something for investors to take note of. More homebuyers and sellers are looking for all-in-one solutions as they enter a real estate transaction. Investors need to find ways to compete with their services or deliver similar solutions.
Reali stated in its release that they've achieved a 7x year-over-year (YOY) growth, undoubtedly a boost from the pandemic, which pushed homebuyers online. But despite a pandemic surge for online buyers, the company has maintained a 2x YOY growth in customers, showing there is clearly a demand for the services it offers.
While still small and growing, real estate fintech start-ups like Reali are disrupting the market. This raise will help the company's services reach more people, making it something to watch over the next few years.