UpEquity, an Austin-based startup that makes a technology platform for homebuyers, has raised $50 million as it looks to continue its rapid growth.
The company, which was founded in 2019 by Tim Herman and Louis Wilson, says its mission is to use technology to improve the homebuying process.
UpEquity’s funding round included $20 million in equity and $30 million in debt. The round was led by S3 Ventures. The latest investment brings the company’s total funding to $77 million to date.
The company says its platform eliminates the need for a traditional bank home loan.
Homebuyers with good credit are able to use the company’s platform to get approved for a mortgage, which they can then use to make what is in effect an all-cash offer for a home. This allows customers to buy a new home before they’ve sold their current home, the company says.
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The company charges an interest rate on the loan that is determined by various factors, and homeowners make payments directly to UpEquity to pay off the mortgage on the house.
“At the end of the day, our vision is to create equal access to the American dream through frictionless, on-demand homebuying, and it starts with bringing technology into the underwriting process,” UpEquity CEO Tim Herman said in a written statement.
UpEquity makes an automated underwriting engine that aims to speed up mortgage closing times. Currently, the company is able to close a mortgage in an average of 18 days, but it is working to bring the turnaround time to 10 days, as opposed to 50 days on average with traditional methods.
UpEquity predicted that it will originate more than $1 billion in mortgages in the next 12 months, up from $100 million in 2020.
The company said it is looking to help average homebuyers succeed in a highly competitive real estate market.
“We’re giving our customers more choices than the legacy mortgage industry. We’re able to do so without sacrificing essentials like competitive mortgage rates and while providing an exceptional customer experience,” Herman said. “This gives the average American a more fair chance of winning the home they want.”
The company offers its mortgage marketplace in Texas, California, Colorado and Florida and is working to add a dozen states by the end of the year.
As part of the new funding round, S3 Ventures Partner Charlie Plauche is joining the UpEquity’s board of directors.
The company is among a number of technology real estate startups including Austin-based Homeward, and Ojo Labs. UpEquity said in a statement, it’s among a rising class of startups called “Power Buyers” that work to help home buyers make all-cash offers.
Homeward, which was launched in 2018 by Tim Heyl with the idea of making it easier to buy and sell homes, landed $371 million in funding earlier this year to grow its business, meet demand, and expand into new markets.
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