By far, 2020 was the busiest year for Homeward, an Austin-based home finance company.
“No one knew at the beginning of Covid what kind of a recovery it was going to be,” said Matt Thurmond, Homeward’s Chief Strategy Officer.
In fact, in March and April, there was a sharp drop in home sales and listings. But by May and June, people realized this pandemic was here to stay for a while, Thurmond said. That’s when people started shopping for homes with backyards, home offices, swimming pools, updated kitchens, game rooms, and other amenities that make living and working from home nicer.
As a result, Homeward saw a huge surge in business, Thurmond said.
And to help fuel its growth in late May, Homeward announced it had secured funding of $371 million, including $136 million in equity and $235 million in debt. Norwest Venture Partners led the equity financing, with participation by Blackstone Alternative Asset Management, Breyer Capital, and existing investors, Adams Street, Javelin, and LiveOak Venture Partners.
Homeward has created a product that allows its customers to make all-cash offers to secure their next home before selling their existing home. The Homeward Cash Offer eliminates the financing, home sale, and appraisal contingencies.
The company plans to use the funds raised to open additional markets. It currently serves homebuyers in select markets in Texas, Colorado, and Georgia.
“We anticipated cash offers becoming standard a few years ago — sellers prefer cash offers because they are much more certain to close,” Homeward Founder and CEO Tim Heyl said in a news statement. “We designed our cash offer in a way that enables real estate agents to make every buyer a cash buyer. Our instincts were right — that’s obvious from the tremendous demand we’re seeing today.”
Homeward works with real estate agents to complete the sales. It has partnered with Realty Austin, a brokerage team of more than 570 agents.
“Customers find a home they love, and we buy it,” Thurmond said. “We hold it. Then they can buy it back from us when they sell their house.”
That solution came from problems Heyl, a top real estate agent in Austin, encountered when he was closing deals. Buyers often couldn’t buy a new home until they sold their old home. So, he created Homeward to provide a solution.
Homeward also has its own in-house mortgage and title companies to handle the entire transaction. And the company is hiring across all divisions, Thurmond said. It grew from just 20 employees a year ago to 220 today and it expects to be at 500 by the end of this year, and 1,000 in 2022, he said.
All Homeward employees are working remotely, Thurmond said. They have the option of going into the office, he said. But the office has become more of a perk, he said.
