Seattle-based home services software company Porch Group (Nasdaq: PRCH) is making another acquisition, this time buying the Boulder, Colorado-based mortgage tech company Floify.
Porch is paying $80 million in cash and $10 million in stock for the acquisition, which has closed. With the acquisition announcement Wednesday, Porch has announced more than a half-dozen acquisitions so far in 2021.
Founder and CEO Matt Ehrlichman said the company is organized in a way that allows Porch to acquire companies without becoming disjointed.
"We've built a platform. This is what we've invested in for years and years and years, so that we can be able to acquire or build a software, product or new vertical," Ehrlichman said. "We've organized the company in a decentralized operating model so we can be able to bring these companies in."
Floify's 47-person team will be joining Porch. According to Ehrlichman, the employees don't have to relocate. He added that Floify will keep its brand.
Porch acquired the Texas-based insurance company Homeowners of America (HOA) for $100 million in April. In 2021, Porch has also acquired the marketing and data platform V12, the software company for roofing contractors iRoofing, the software company for home inspectors PalmTech and the whole home warranty provider American Home Protect. Porch in September announced it is acquiring CSE Insurance for $48.6 million cash in a deal expected to close in the second quarter of 2022.
Porch, launched in 2013, provides software for home services and moving companies. The company went public on the Nasdaq in December through a merger with a special purpose acquisition company.
Porch reported second quarter 2021 revenue of $51.3 million in its earnings results, which were released in August. With the Floify announcement, Porch is raising its 2021 revenue outlook from $187.5 million to $190 million.
In its acquisitions before Floify, according to Ehrlichman, Porch paid about 2.5 times the acquired company's revenue, but it paid about 5.75 times the revenue of Floify because the company was growing more rapidly.
"Porch has obviously expanded our vertical software platform into a number of these fragmented home services industries where the companies in those industries meet consumers at key moments in time," Ehrlichman said. "For us it's obvious, in some respects, to want to provide software to mortgage companies and loan officers."
