During the first half of the year, venture capital funds invested $1.2 billion in 102 PropTech deals, according to PitchBook, compared to $5.6 billion in 269 deals for all of 2019. By May, Zak Schwarzman, a general partner at venture capital fund MetaProp said funding rounds generally fell into one of two categories: emergency infusions to get a company through the pandemic (think Airbnb’s $2 billion in debt and equity) or strategic investments to help startups seize a market opportunity. But with most startups raising money in 12- and 18-month cycles, a third group of companies found themselves smack in the middle of fundraising just as COVID-19 struck. Beyond logistics, raising money during a pandemic has raised a host of hairy questions, including how to value a company when large swaths of the economy are shut down.
Since the pandemic began, remote online notarization (RON) has helped bridge the social distancing gap, allowing deals to close without in-person contact, and thereby helping to maintain business continuity. Making RON a legally acceptable form of documentation went from an issue on the periphery to the law of the land in 28 states as of July 8, with more expected to pass their own regulations in the coming weeks and months. With this increased RON implementation, Notarize, a Boston-based provider of electronic notary services, said it had a 400% spike in overall revenue during the second quarter.
Building just one affordable studio apartment in San Francisco can cost as much as $600,000 to $800,000—and finishing the building can take as long as six years. A few years ago, Tipping Point Community, a local nonprofit, started searching for a better approach. One part of the solution: changing how apartment buildings are built. In a football-field-size factory in Vallejo across the bay from San Francisco, a company called Factory OS is constructing apartments for a project that Tipping Point and its partners hope can be a new model for addressing the housing crisis in the Bay Area—and for the challenge of homelessness specifically, in a region where around 28,200 people are homeless. The project is expected to cost less than $400,000 per unit and should be completed in less than three years.
North Texas’ biggest homebuilder, D.R. Horton Inc., is teaming up with Zillow to help new buyers sell their existing homes. The agreement with Zillow’s Offers program comes at the same time Arlington-based Horton is reporting a surge in new home orders. D.R. Horton said this week that its new sales orders were up 38% in the second quarter. The Zillow program will help sellers market their houses and will make a bid to buy the property outright.
MetaProp, a New York-based venture capital firm, is looking to raise $200 million — its biggest fund yet — to back later-stage PropTech startups. The five-year-old company disclosed the fund, dubbed MetaProp Growth Select I, in a regulatory filing with the U.S. Securities and Exchange Commission on Wednesday. Co-founder Aaron Block is listed as the fund manager. MetaProp declined to comment. But in raising a growth fund, it appears to be shifting its focus from seed- and early-stage companies to more mature startups seeking bigger checks to fuel growth.
Black Knight has announced an agreement with affiliates of private equity firm GTCR to purchase Optimal Blue for $1.8 billion. Under the deal, Black Knight will combine its Compass Analytics business with Optimal Blue to form a new entity with minority co-investors Cannae Holdings and Thomas H. Lee Partners. Black Knight will own approximately 60% of the new company. Optimal Blue offers a PPE engine, comprehensive secondary services, data and analytics, and a loan-trading platform, among other technologies that support regulatory compliance in the mortgage origination process. The firms expect to close the acquisition in the third quarter.
Porch, a real estate technology venture and home improvement marketplace, plans to become publicly traded through a merger that values the Seattle-based company at $523 million. The agreement, announced last Friday morning, will combine Porch with PropTech Acquisition Corp., a special purpose acquisition company, or SPAC. The Los Angeles-based “blank check” company went public in November in a $172.5 million initial public offering with the intent of making such a deal. SPACs, or blank-check companies, have been surging in popularity as an alternative means for companies to go public, and lucrative transactions for Wall Street banks. SPACs have played a role in 35% of U.S. IPO filings so far this year, according to a report this week by Silicon Valley Bank.
Zibo, which works to provide streamlined and accessible financial services for landlords, has raised $10.5 million in a seed round led by Canaan Partners. QED Investors, Khosla Ventures, and SVB Capital also participated in the round, the release stated. The Zibo tools are meant to help save time and implement new tools like Federal Deposit Insurance Corporation-insured business checking accounts, automated rent collection, online bill pay, and expense management to help streamline tax preparation. According to a press release announcing the deal, a survey of over 100,000 renters by the National Multifamily Housing Council found that around 85% of renters would prefer a digital option to pay rent.
Social distancing is perhaps one of the most prominent guidelines from the Centers for Disease Control and Prevention to combat the COVID-19 pandemic. So when companies look to reopen their offices and buildings, limiting the number of people in a room is key. That’s where Density’s technology, a tool to anonymously count people, comes into play. The startup recently closed a $51 million Series C funding round led by Kleiner Perkins. Density has seen businesses across industries express interest in the company and its products, according to chief marketing officer Aleks Strub. The company did more business in the first 75 days after COVID-19 took hold than it did in all of last year, Strub said.
Hippo Enterprises Inc., hot on the heels of rival home insurance technology business Lemonade Inc. going public, has closed a $150 million financing round. The Palo Alto-based startup is valued in the investment at $1.5 billion, according to the company. New investors Dragoneer and Ribbit Capital joined existing investors like Felicis Ventures and Iconiq Capital in the financing. Hippo, which was valued at about $1 billion in a funding round last year, is preparing for a potential initial public offering, said Chief Executive Officer Assaf Wand.
A company bringing a kind of Street View technology to the construction industry just landed $15.9 million in Series B funding. ZDNet has been following OpenSpace since it came out of stealth in 2018, and the company is a good bellwether for the rapid technology-adoption underway in the $15.5 trillion global building sector. OpenSpace offers a photo-documentation solution that allows builders to walk a job site with a small camera on their hardhat. The result is a navigable, “Google Street View”-like experience, made possible by computer vision that can be viewed and analyzed from anywhere, bringing the job site to remote workers.