Homeward, a startup that helps homeowners buy a new home before selling their current one or obtain a cash offer for their property, has raised $120 million in a Series D funding round led by asset-backed credit specialist Saluda Grade. Continental General Insurance Co., Citi Ventures, Magnetar Capital, Norwest, and LiveOak Ventures participated in the round, along with Adams Street Partners, Javelin Venture Partners, Harmony Partners, Era Ventures, and First American.
The round brings Homeward’s total equity funding raised since its founding in 2018 to $360 million. The company did not disclose its new valuation, but said it was close to the $136 million valuation from its Series C round in 2021, when it was valued at slightly more than $800 million. The Austin-based company also secured a $330 million asset-backed debt facility to finance more home purchase transactions.
Solving the Timing Problem Between Selling and Buying
Homeward operates through real estate agents. Its Buy Before You Sell program provides short-term financing to purchase the next home before selling the current one, while providing a guaranteed backup offer for the existing property. Its Sell Before You List program offers a cash purchase and closing within weeks, after which Homeward improves the property and resells it on the open market, returning the profit to its original owner in exchange for a program fee.
The company says its cash-offer program is now available in the 48 contiguous U.S. states, and plans to make Buy Before You Sell available nationwide by the end of the year. It also offers Buy With Cash, which enables a buyer to make a cash-backed offer and then refinance through a traditional mortgage after completing the purchase.
A Strategic Shift Driven by Higher Interest Rates
Between 2019 and 2022, Homeward focused on helping customers buy their next home before selling their current one. But rising interest rates and moving costs led more homeowners to stay in their properties, narrowing the potential customer base.
The company responded by launching Sell Before You List in early 2023, targeting homeowners who needed to sell their homes quickly even without buying a replacement property. According to what Crunchbase News reported from founder and CEO Tim Heyl, this shift helped increase Homeward’s revenue more than fourfold since 2021, despite his estimate that U.S. home sales fell by about 30% during the same period. The company says it has worked with more than 25,000 real estate agents and facilitated transactions worth more than $4 billion.
How Does the Company Use Artificial Intelligence?
Homeward uses large language models to extract data from documents and help underwriting teams review videos, photos, and inspection reports. The extracted information includes details about surfaces, heating and cooling systems, and the property’s general condition, with the aim of reducing manual work and speeding up transaction processing and property valuations.
Why Does This Funding Matter?
The new capital will finance the expansion of financing products and investment in the technology platform, while the debt facility provides additional capacity to finance real estate transactions. Homeward’s model is significant because it addresses a practical obstacle in the housing market: the connection between buying a new home and selling the current one and unlocking its equity.
But the model does not eliminate financing costs or market risks. Buy Before You Sell charges a fee of 1% in addition to a monthly interest cost, while Sell Before You List charges a single fee whose amount the company did not specify. Expansion also depends on Homeward’s ability to finance new transactions and sell properties after improving them, in a market where the company said higher interest rates have made moving decisions more difficult.