A Cincinnati-based startup that’s disrupting the way people buy and sell homes has reached a key milestone in its seed-stage fundraise as it prepares to grow its team and footprint beyond Greater Cincinnati.
Homeshake, a proptech startup that offers homebuyers and sellers a real estate agent-free marketplace, has passed the $1 million mark as part of its crowdfunding campaign launched on the popular platform Wefunder in October. The raise has attracted more than 180 investors so far.
Homeshake CEO and co-founder Nick Rabin declined to talk specifics since the round is still open. Federal regulations restrict publicity during fundraising. The campaign goal, per the Wefunder site, is to raise $1.5 million at a $12 million valuation.
The round will allow the company to add to its team, accelerate product development and expand geographically.
Homeshake, which maintains office space at Over-the-Rhine’s Union Hall, has grown rapidly since its first sale closed in June 2020. Sales volume for 2022 is on track to increase 50% year-over-year, while revenue is up three times over 2021.
Rabin said numerous customers have invested in the business. Former clients have contributed more than $100,000 to the crowdfunding campaign and more than $300,000 in the business overall.
“We have a long list of happy customers who loved their experience and want to invest in the business, which prompted us to look at crowdfunding more seriously,” he told me. “This allows fans, friends, customers and future customers to invest in a company they believe in. They become some of our biggest ambassadors.”
The funds would allow Homeshake to essentially double its team, adding around 10 new positions, including a chief marketing officer, chief technology officer, software developers and customer support roles, among other hires.
The additions should increase the company’s software development capacity by more than 10 times.
Market expansion is also on the horizon. Today, Homeshake is available in Hamilton, Butler, Warren and Clermont counties.
Homeshake’s founders listed Northern Kentucky and various other Ohio cities as their next targets.
The goal is to take Homeshake national.
“There's been a lot of interest from customers we haven't been able to serve,” Rabin said.
Rabin, a former senior vice president at North American Properties, and Jonathan Bennie, a real estate attorney, founded Homeshake to disrupt the home buying and selling process, much like Robinhood, Root, Carvana and Airbnb have done in industries of investing, insurance, auto sales and travel, respectively.
Homeshake replaces the traditional model of agents and commissions with an online peer-to-peer platform.
Through the app, buyers and sellers can direct message, schedule tours or make an offer using a special dashboard. Homeshake organizes, automates and simplifies the process from initial contact to final closing. That differentiates it from a for-sale-by-owner or other discount broker service.
And, instead of a 6% commission, Homeshake takes 1%. For a $500,000 home, that’s a difference of $25,000.
Rabin said Homeshake customers have saved more than $1 million in commissions.
“As the younger generations enter the homebuying phase of their lives, they will naturally turn to digital alternatives that are quicker and more cost-efficient,” said James Steger, CEO of Blue Ash-based logistics firm Integrity Express Logistics. He's the lead investor in Homeshake’s Wefunder campaign. “Homeshake is a good blend of technology and personal touch … (and is) positioned well to acquire market share.”
While the housing market is cooling, after a spike in mortgage rates in the spring slowed demand, the company’s outlook remains strong.
“People will always need to buy and sell homes,” Rabin said. “As housing prices moderate, it strengthens our value proposition and Homeshake becomes even more attractive – when equity’s a little tighter and people pay more attention to transaction costs. Consumers expect a better experience. It's perfect timing.”
