Alternative financing firm Knock has secured $10 million in financing from Second Century Ventures and Foundry Venture Capital, the venture capital arm of the National Association of Realtors. The company has raised a total of $15 million through Wefunder.
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Alternative financing firm Knock has secured $10 million in financing from Second Century Ventures and Foundry Venture Capital, the venture capital arm of the National Association of Realtors.
However, the company didn’t stop there.
The funds are part of a larger effort to raise a total of $15 million, with the remainder hoped to be obtained through an equity crowdfunding platform offering the opportunity to non-accredited investors sponsor, According to a press release sent to Inman on February 26.
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The public financing company allows users to invest as little as $100 to acquire a stake in Knock, which is known for its bridge loan financing that enables sellers to acquire a new home before selling their existing home. Knock is a privately held company, and a press release states that the company recently “secured more than $125 million in a new revolving credit facility to fund Knock’s bridge loan over the next several years.”
Knock co-founder and CEO Sean Black said in a statement that the disclosure of this round echoes the company’s larger message of “democratizing the home selling experience.”
“We want to further democratize the business by giving our partner agents, loan officers and clients the opportunity to invest in Knock ahead of a potential IPO or acquisition,” said Black. “Through the Wefunder campaign, which we consider a real estate The first event of its kind in the field), our stakeholders were able to share the benefits of the company they use every day.”
Knock has been wavering on its branding efforts over the past few years as market conditions pushed various financing entities in different directions in a concerted effort to wait out a stubborn lull in home sales.
“Knock took advantage of the down market and pivoted its business model to fill a much-needed gap in the industry,” the release said. “The result is Knock Bridge Loan, an on-demand financing solution that helps lenders and agents provide customers with Providing more convenience and certainty to homebuyers and making them more competitive.”
This loan leverages a homeowner’s current equity to offer a range of possibilities, from a down payment on their next home to home repairs and pre-sale updates. Nock works with thousands of loan officers and tens of thousands of real estate agents, according to the release.
Knock Bridge Loans, once known as Knock Home Swaps, are an innovative financing tool that help home sellers move without relying on sale funds, a common occurrence and reason for deals to derail.
It also launched a bridge loan product for pre-market home improvements, announcing in early 2023 that the total amount available would increase to $35,000. It’s called the “Home Readiness and Marketability Allowance.”
In 2022, Inman reported on Knock’s buyout program, which allows homebuyers to use the equity in their existing homes to lower their mortgage rates or pay for a larger down payment on their next home purchase, a response to lingering concerns. A response that begins in an era of crisis. Pandemic rates soar.
The company initially positioned itself as a real estate tech company when it launched in 2015, but the company was “sold on the condition of their current home” as aspiring homebuyers found themselves able to pay their mortgages but not cash-rich enough to “sell the condition of their current homes” without inspecting the homes. The company’s stock price soared as the terms were offered to buy a new home.
Nock’s early success partly spawned the industry term “power buyers,” referring to companies that offer cash advances and home-buying programs outside of traditional home lenders. It also works to certify agents across the industry on how to sell their Home Swap products.
The company is growing with the goal of going public, a goal Black also achieved with his former company, Trulia. However, despite a massive cash infusion of $220 million at the same time, Nok has encountered setbacks in this effort, leading to significant layoffs in 2022.
Black is pleased that his company has persevered during such a prolonged drought in overall real estate market activity.
“We are proud to have not only weathered the storm, but to have taken advantage of the downturn in the market by offering our proprietary buy-before-sell solution to any lender or agent to enable their clients to purchase their dream home,” Black said. more competitive,” the press release said. “The competitive landscape has been virtually eliminated and we are excited about our growth trajectory.”
Knock operates in 75 markets across the country.
Email Craig Rowe
