A fintech firm peddling alternative home valuations for institutional investors just closed a $65 million funding round.
House Canary, which automates the sometimes costly and lengthy process of home valuations, just closed a $65 million funding round led by Morpheus Ventures, Alpha Edison, and PSP Growth, the company announced Thursday. The new funding brings its total to $130 million.
The startup, which reported that its revenue doubled in each of the last two years, provides home valuations to its institutional investor clients at a fraction of the cost of a conventional valuation.
“Reliably automating home valuations replaces a two- to three-week human appraisal process with instant, actionable valuations at a fraction of the price,” said House Canary co-founder and CEO Jeremy Sicklick. “Consumers and institutional investors buying homes as well as financial institutions providing mortgages demand this, and we power it across America’s housing market.”
Alternatives to traditional valuations for mortgages have drawn recent scrutiny, including from a professor who wrote the national appraisal standards in the 1980s, who told the Wall Street Journal that investors are “just dumbing down the standards to make the loan.
Institutional investors in the $30.7 trillion residential real estate market turned to alternative valuations in the wake of the housing crisis, when firms including Invitation Homes, Inc., formerly owned by publicly-traded private equity firm Blackstone Group, scooped up thousands of homes in foreclosure.
But the streamlined process has also taken hold in the federal government. Fannie Mae, the federal entity that backs and securitizes mortgages, saved approximately $2.6 million by using alternative valuations when it insured $1 billion of Invitation Homes single-family home debt.