Real estate focused startup HomeLight has just landed a new $40 million funding round led by Menlo Ventures, saying it plans to use the cash to scale out its rapidly growing business.
HomeLight was founded in 2012, setting out to connect homeowners who’re looking to sell quickly with the real estate agents who’re best able to help them do so at the best possible price. Before HomeLight arrived on the scene, most real estate sellers would choose an agent based on referrals or word of mouth. But while referrals usually work out okay for most sellers, the method isn’t always perfect.
HomeLight thinks it can improve on this sometimes hit-and-miss method by using a data driven approach to real estate agent recommendations. The company pulls data on agents from more than 100 different sources, and evaluates almost 30 million real estate transactions across the country in order to identify the best agents in each region.
The best bit about it is that HomeLight’s incentives are aligned with those of the seller, since it gets paid via referral fees only when the agent closes the deal sourced on its platform. As such it makes sense for HomeLight to actually find the best agent for each seller, rather than promoting agents who pay fees for the privilege.
HomeLight claims that sellers are able to sell their properties around one month faster than other sellers, on average. In addition, it claims the average selling price is three percent above listing prices.
“A good agent matters,” HomeLight’s CEO Drew Uher told TechCrunch in an interview.
Uher said the best agents generally have the same traits – excelling at preparing homes for sale, being able to price them correctly, and having experts on hand to help sellers throughout the transaction process. These “experts” include people like photographers, home stagers and others who can help ready and process a sale.
HomeLight’s business model seems to work, for the company claims revenue growth of a whopping 500 percent since its last funding round. The total valuation of its listings this year exceeds $1 billion.
“The market opportunity in front of us is just so large… A small amount of market share can be a big opportunity for us,” Uher said.
Uher told TechCrunch the new money will be used to invest in personnel, including growing its team from about 60 today to more than 100 by the end of this year.