Paint by numbers
Material Bank, a kind of Amazon for architects and designers, raised $175 million to expand its marketplace for paint, tile and other products used to put the finishing touches on projects.
The Series D round, led by Brookfield’s venture capital arm, Brookfield Growth, reportedly valued the Boca Raton-based startup at $1.9 billion, although the company declined to confirm that figure. Fifth Wall, RXR and Softbank’s Vision Fund 2 also participated in the round.
Material Bank frames its marketplace, launched in 2019, as a solution to the typically expensive and time-consuming materials search and sampling process. Its clients can scan offerings from hundreds of brands, request samples and have them delivered by the following morning — and at no expense, since the brands themselves shoulder the costs.
“This has really become the primary way a lot of these manufacturers connect with buyers,” CEO Adam Sandow said.
The Series D brings Material Bank’s total equity funding to $325 million. It plans to launch in Japan at the end of 2022, and in Europe early next year.
Turning a corner
Opendoor logged its first profitable quarter in its eight-year history, bringing some relief to its depressed stock price.
The San Francisco-based iBuyer, along with competitors Offerpad and Redfin, has struggled recently to convince investors of the resilience and long-term viability of algorithm-based home flipping, especially after Zillow failed at it last year. That challenge has become more formidable with rising interest rates now weighing on home prices.
Opendoor has responded to recent market turmoil by paying less for homes, and its risk-management systems, refined through its expansion into 48 markets, should help it weather any downturn in the housing market, CFO Carre Wheeler said on an earnings call in early May.
“Our systems and margin structure are designed to be durable across different housing environments,” she said.
Opendoor raked in a record $5.2 billion in revenue in the first quarter and surpassed Wall Street’s expectations across several performance metrics for the period.
“These past eight years of investments and hard work on our cost structure, automation, technology platform and pricing engine are enabling us to deliver durable margin improvements as we scale,” CEO Eric Wu said.
STAT OF THE MONTH
There were 12 proptech financing rounds of $100M or more during the first quarter.
Home sharing, of a kind
For homeowners squeezed by inflation and stagnant wages, there is a growing number of proptech and fintech startups offering a lump sum of cash in exchange for a stake in their home’s value.
One of them, Palo Alto-based Point, claims to have grown its so-called home equity investments, or HEIs, five-fold in the first quarter. In early May, the company raised $115 million in a Series C round led by WestCap at an undisclosed valuation.
An “asset-light” fintech, Point originates and services HEIs on behalf of institutional investors. When a critical amount of them has been amassed, the startup, with the help of investment bankers, packages them into a new security marketed to real estate and mortgage-backed securities investors.
According to Point’s management, the startup is the first to have completed a securitization backed entirely by HEIs.
“The securitization is the point where we went from junior varsity to varsity,” CEO Eddie Lim told The Real Deal. “There’s liquidity and we can show that these are really institutional grade.”
Point’s Series C brings its total equity funding to $145 million.
Better together
Intercontinental Exchange, the owner of the New York Stock Exchange, agreed to buy mortgage data firm Black Knight for $13.1 billion in cash and stock in a bid to produce “a true end-to-end solution” in mortgage services, according to ICE CEO Jeffrey Specher.
Jacksonville-based Black Knight provides software, data and analytics for the real estate and housing finance markets and employs nearly 6,500 people. Atlanta-based ICE, which for years has been angling to play a bigger role in the country’s mortgage industry, wants to use data and automation to lower the cost of obtaining a mortgage and homeowners’ likelihood of default.
The deal comes at a potential turning point in the U.S. housing market, as rising interest rates threaten to derail a years-long run in prices. It is expected to close in the first half of next year, pending approval from Black Knight shareholders.
Small bytes
• Lev, the commercial real estate finance marketplace, raised $70 million in Series B funding, confirming an earlier TRD report.
• Tulu, a startup that facilitates on-demand access to home appliances and other rentals, rounded up $20 million in Series A funding.
• Radius, a tech-enabled real estate brokerage, raised $13 million in a Series A round.
• Leasecake, a startup that built a cloud-based operating system for managing lease contracts and payments, scored $12 million in Series A funding.
• Backflip, a platform for residential real estate investment, raised $8 million in a seed round.
• RET Ventures, the proptech-focused venture capital firm, will manage a new $80 million ESG-oriented investment fund sponsored by multifamily REITs Essex Property Trust and UDR.
• WorkChew, a startup that connects remote workers with empty hotel and restaurant space, bought New York City flex-office provider KettleSpace’s workspace assets.
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