Philadelphia real estate startup Houwzer raised a $118 million Series B round as it prepares to launch three new home-buying products, hire more executives and continue expansion into its East Coast markets.
The Series B comprises $18 million in equity and a $100 million warehouse line of credit, a type of credit given to mortgage lenders. Existing investor Edison Partners led the funding round. Admiral Capital Group, GOPhilly and Ben Franklin Technology Partners also participated in the Series B. The latest funding round brings the company’s total equity funding to $35 million since its inception in 2015.
Princeton-based Edison Partners led Houwzer’s $9.5 million Series A in February 2020.
The hallmarks of Houwzer’s business model are its flat $5,000 listing fee for sellers, flat buyer’s broker commission of 2.5% paid at closing and the startup’s salaried brokers. In combination with Houwzer’s tech-based platform, the startup says homeowners save an average of $15,000 in commission.
The startup operates across six metropolitan areas in Philadelphia, Washington, D.C., Baltimore, Orlando, Tampa and Jacksonville, Florida.
“This funding round further cements our innovative approach in creating a new model for residential real estate,” Houwzer co-founder and CEO Mike Maher said in a statement. “Our vision is to reimagine homeownership for good, making it affordable, fast, and fun so buyers and sellers can maximize their next chapter."
The Series B will finance the launch of three new products from Houwzer: Cash Advantage, Convenience Offers and Buy Before You Sell. Cash Advantage lets buyers get pre-approved by the startup’s mortgage advisers to make a cash offer using funding from Houwzer. Convenience Offers gives sellers the option to list with Houwzer and get an all-cash offer slightly below market value as a backup. Buy Before You Sell lets buyers use Houwzer funding to snap up a house before they sell their current home.
The funding will also be used to expand in the markets Houwzer currently operates in while hiring executives in marketing, product, people and home services, the company said.
Houwzer’s sales volume has reached close to $2 billion over 4,000 sales since it was founded, the startup said. The startup was named to the Inc. 5000 list of the fastest-growing companies, ranked at No. 918 last year with 525% revenue growth over three years.
