Home equity investment tech company HomePace has secured $7 million in Series A funding, the startup announced today. The round was led by LENX, the corporate venture arm of US homebuilder Lennar and also included prior investors Bling Capital, NextView Ventures and Ride Ventures.
While HomePace makes its headquarters in Park City, Utah, HomePace’s Co-Founder and CEO Joe Cianciolo lives in the Triangle and said the funding will enable HomePace to hire more employees here.
Cianciolo said he couldn’t be more excited about partnering with Lennar. As the second-largest home builder in the country, it provides credibility that what HomePace is doing is real, Cianciolo said.
“It’s certainly the early days of what we’re doing, so we’ve got a lot of room to grow and a lot of stuff that we need to still capitalize on,” Cianciolo said. “But I think it’s a very good early proof point for us.”
The investors said they were impressed with HomePace’s founding team. Cianciolo and COO Megan Graf were among the early employees at FutureAdvisor, an early digital wealth management platform that was acquired by BlackRock, the world’s largest asset manager. Cianciolo and Graf stayed on with BlackRock after the deal. The third co-founder, CIO Jeboah (Bo) Joerg, was a former VP in Derivatives Trading at Goldman Sachs.
NextView Ventures Partner Melody Koh said the HomePace founders “helped scale fintech companies from 0 to 100 at FutureAdvisor and have relevant domain experience from working at BlackRock and Goldman Sachs.”
HomePace was founded in late 2020 as a home equity solution, providing home owners the ability to convert their built-up home equity into money in exchange for sharing a portion of the gains or losses in their home’s value over time. These homeowners can receive up to $250,000 in cash without taking on additional debt or needing to make monthly payments.
With HomePace’s new homebuyer solution, customers can also receive cash toward a down payment in exchange for sharing a portion of their home’s future value. Again, the homebuyers don’t add to their debt load or need to make monthly payments.
“We have been closely monitoring this emerging landscape of home equity investments and recognize it is an innovative way for homeowners to access record levels of home equity in a non-intrusive manner,” said Eric Feder, President of LENX and member of HomePace’s Board of Directors in a statement. “We look forward to working with HomePace’s founding team to expand the business into the new home market as an affordable instrument to offer to our homebuyers in the years to come.”
LENX presents itself as an ideal partner for HomePace since they understand the home buying and home ownership space in a way that the average venture capital firm likely wouldn’t, according to Cianciolo. They also offer significant data sources that HomePace can now tap into to help the company reach their goals.
“I think we can build something that’s very differentiated from others in the space and it creates a small moat, but a moat for us over time,” Cianciolo said.
Help for homebuyers as well as homeowners
Living in the San Francisco Bay area before moving to Wake Forest last April, Cianciolo was no stranger to the ferocious housing market. He knew that if pulling together a down payment for a home with a price tag of $1.5 million or more was challenging for him—someone who was paid well while working in finance and fintech—then the average American would definitely be struggling.
He wanted a solution, so he turned to Graf and Joerg—who soon became his co-founders—and asked the question:
“Can we go make a dent in this thing?” Cianciolo said. “And I think we were all of mind that we could go do something pretty special here, and we’re off to the races at this point.”
Already serving homeowners in Arizona, Colorado, North Carolina, Tennessee, Utah and Washington, HomePace is now looking to build out its homebuyer program, expanding from just the homeowner space. This development comes at a pivotal time as interest rates continue to rise and home affordability becomes even more challenging.
With the new $7 million in funding, Cianciolo said they will hire roles in business development, engineering and operations and expand their market geography beyond the six states.
As a company that’s been remote from the start with the co-founders spread out across the country, HomePace has still heavily invested in hiring in three specific regions: Park City, Utah; Seattle; and the Triangle. There’s a sizable tech talent base in the Triangle stemming from the major universities here as well as those brought by Google, Apple, Pendo and the like, Cianciolo said, and it’s something HomePace hopes to capitalize on—and a big reason that the Southeast native moved his family to the Triangle last year.