HomeLight was founded in 2012 to connect home owners looking to sell with real estate agents in their area who are likely to close quickly and get the best price for their homes. With its business quickly growing, the company has raised $40 million in new funding led by Menlo Ventures.
Despite the rise of digital platforms like Zillow, Trulia and Redfin for finding homes for sale, there’s been a pronounced uptick in the number of properties sold with the help of real estate agents. But since the vast majority of real estate agents are chosen through personal referrals or word of mouth, most sellers don’t know how good an agent is before they sign a contract.
HomeLight hopes to capitalize on this with a data-driven approach to making real estate agent recommendations to home sellers. By pulling in data from more than 100 different data sources and evaluating nearly 30 million transactions around the country, HomeLight is able to identify the best agents for any given region.
HomeLight’s data gives it a huge advantage, and its incentives are aligned with users since it takes a referral fee when agents close business sourced on its platform. Users who find their real estate agent through HomeLight are able to sell their homes about a month faster and for 3 percent more than list price on average, founder and CEO Drew Uher told me.
“A good agent matters,” he said. According to Uher, the best agents excel at preparing a home for sale, pricing it correctly, and will usually have “an army of folks” to help sellers through the transaction. That means knowing the best photographer, stager, and other professionals in the area who can get a home ready for sale.
It appears the model is working, as HomeLight has grown revenue by nearly 500 percent since its last round of funding and it has listed over $1 billion in homes this year to date.
“The market opportunity in front of us is just so large… A small amount of market share can be a big opportunity for us,” Uher said.
Now, after five years of running a pretty capital efficient business, HomeLight is ready to pour gasoline on the fire. With that in mind, the company is announcing today that it has raised a $40 million Series B round of financing led by Menlo Ventures, with participation from Citi Ventures.
Previously the company had raised $15.5 million from investors that included Zeev Ventures, SGVC, GV, Crosslink Capital, Bullpen Capital and Innovation Endeavors, among others. Along with the funding, Menlo’s Tyler Sosin will join the board as a director, while Venky Ganesan of Menlo and Dovi Frances of SGVC will join as board observers.
The new funding will be used to invest in personnel, including growing its team from about 60 today to more than 100 by the end of this year, according to Uher. Much of that investment will be in sales and marketing, operations and engineering across its offices in San Francisco and Phoenix.