Reali, a startup that wants to streamline second-time home buying, raised $250 million in Series B funding, with plans to scale its operations in California and eventually the rest of the country.
Early-stage venture fund Zeev Ventures led the round, which included $75 million in equity, $25 million in venture debt and $150 million of warehouse financing. Akkadian Ventures and Signia Ventures, among others, also participated in the raise.
The Series B brings the startup’s funding efforts to-date, which have all been led by Zeev, to more than $300 million. Reali’s $10 million Series A closed in December 2017.
Reali did not offer a specific valuation figure in its release.
A self-described real estate and fintech company based in San Mateo, Reali is one of many startups attempting to shake up the legacy residential real estate market, which is still overwhelmingly dominated by local agents and realtors.
The company has evolved significantly since its October 2016 launch. Originally conceived by co-founders Amit Haller and Ami Avrahami as a discount brokerage, mobile-only application, Reali is now vertically integrated, with internal mortgage, title and escrow services, its own agents and loan officers, and a property buying team.
Today, the company has what CEO Tyler Baldwin called a “high-tech, high-touch” approach, combining agents in the field with an online experience.
“Really it’s a blend of technology experience, with humans at the right time and the right place,” Baldwin told The Real Deal.
Reali’s business grew sevenfold during 2020 as the pandemic forced home buyers and sellers to explore online platforms. Its customer base doubled.
The company plans to expand its two main consumer product offerings, Reali Trade-In and Reali Cash Offer, designed to streamline the process for second-time homebuyers who have equity “trapped” in their first home. Reali buys the new home on the buyer’s behalf, then preps and facilitates the sale of the first home, after which the buyer buys the new home directly from Reali.
Because Reali purchases the new home in cash, it can close quickly, giving the buyer an edge in California’s competitive housing markets and preventing the need to find temporary housing in the interim, Baldwin said.
Where there are multiple offers, Reali’s buy offers win at a 200 percent higher rate than a contingent financed offer, according to Baldwin. And because the first home is empty and staged when it is put up for sale, it tends to sell for 1 to 5 percent higher than the listing price.
“Over the last several years, we realized that although customers do like to save money, what they care more about is winning the next home,” he said.
Reali currently offers its full product range in the San Francisco Bay area and in Sacramento, as well as parts of Southern California including Orange County, Riverside and the San Gabriel Valley. Reali Loans is the only product available nationwide.
With the Series B raise, Reali plans to expand into other California metros over the next year and, eventually, other states.
“We are still a small company, but we have aspirations of building market share and a consumer brand in the markets we’re in.”