Advancements in technology have radically transformed many consumer markets and had a profound impact on our lives – from the way we order takeout (DoorDash), book travel (Airbnb), meet someone (Bumble), or even purchase a car (Carvana)! Consumers have been trained to open an app and simply click a button to get whatever they want.
Yet, buying a home – one of the most important decisions of our lives — is an experience that has not fully embraced digitization, a startling fact for an industry so massive. To put in perspective, real estate is the largest asset class in the world. On the residential side, about 66% of Americans are homeowners, roughly 6.5M+ (existing and new) homes are sold annually, which translates to about $2 trillion in home transaction value and roughly $120B in commissions for real estate brokers (based on the average 6% commission rate split between buyer and seller agents).
We believe there is a massive opportunity for tech-forward platforms to disrupt and create step-functionally better homebuying experiences for all constituents. The industry is still highly reliant on offline, independent agents to facilitate sales – more than 3 million active real estate agents across more than 106K real estate brokerage firms in the U.S. to be exact. The result is a home-purchasing journey that remains opaque, complex, and frustrating at present, characterized by inefficient scheduling and home tours, stressful negotiations on price and potential renovations, mountains of paperwork, title insurance, even more paperwork, and escrow. Concurrently, there is the arduous process of obtaining a mortgage, and despite historically low interest rates, it has become increasingly difficult to actually get approved for one.
The opportunity for disruption is not only fueled by the market’s sheer size, but also by the lack of innovation to date. The most meaningful development to the buyer experience was the emergence of the online aggregators (i.e., Zillow, Trulia) in the early 2000s, who made it easier to find home listings and retrieve more accurate information about them. While these businesses have created a significant amount of value–a testament to the absolute size of the market – their digital experience effectively ends at the phase of “discovery”, and the rest of the homebuying process remains somewhat old-fashioned. Tech-enabled brokers, like Compass and Redfin, have gone further vs. incumbents and integrated more software and technology in their workflows and processes. That said, the focus has still been on the singular agent or 1:1, agent/buyer relationship, not the end consumer experience.
This industry remains one of the largest, undisrupted markets, and we are incredibly excited by companies looking to streamline and digitize the home-buying process, addressing consumer pain points across the entire value chain. In pursuing this thesis, we are thrilled to announce today that Battery is co-leading the Series C for Flyhomes*, alongside our friends at Norwest Venture Partners.
We believe Flyhomes is pioneering the next evolution of innovation in homebuying, offering a fully end-to-end experience to consumers that is both tech-driven, but still human-centered. Under the Flyhomes umbrella sits a brokerage, mortgage provider, and title-and-escrow company. This vertical integration means that consumers can access each of these requisite services necessary to buy a home under one roof, under one single branded experience. The integration of these typically disparate services removes a significant amount of friction to the homebuyer, creating a seamless, holistic experience that is far better than the existing alternatives. The company’s full-stack approach also enables it to offer innovative financial products like the “Flyhomes Cash Offer” and “Buy Before You Sell” programs, supercharging purchasing power and increasing win rate for buyers. The cash-offer program allows qualified clients to present sellers all-cash offers, removing the uncertainty and contingencies that sellers have to deal with in regular offers (i.e. down payment and mortgage). “Buy before you sell” empowers dual-trackers to make a non-contingent cash offer on a home and purchase new one before they sell their existing home, avoiding the temporary hassle in between.
Flyhomes recognizes that homebuying is a deeply personal, very high consideration purchase, with most buyers seeking the expertise of a professional to guide them through the process. Flyhomes offers this via a team of full-time, salaried agents and experts, spread across the company’s live markets, who work closely with each homebuyer and are tightly aligned with the homebuyer’s interests. The company’s software digitizes and automates a significant amount of otherwise laborious tasks (browsing properties, booking tours, submitting documents, applying for mortgage, etc.), enabling these agents to be demonstrably more productive than traditional brokerages, which ultimately benefits the homebuyers they work with.
Flyhomes is led by an exceptionally talented and seasoned executive team. Tushar Garg, the CEO and co-founder, is a technologist with more than ten years of experiences at companies like Microsoft and McKinsey, as well as a deep technical background in AI / ML. Ryan Dibble, COO and founding member, has operated in investing and finance roles across Microsoft, JP Morgan, and Washington Mutual. The rest of the team is rounded out by standout members including VP of Finance and Business Operations Rehan Mohammad (formerly of Deustche Bank, LinkedIn, Under Armour); VP of Growth and Strategy Adam Hopson (formerly Pluralsight, Expedia, McKinsey); and VP of Product Meredith Han (formerly Amazon, Brooks Running).
We are very excited by Flyhomes’ full-stack approach to the homebuying experience and are hopeful for its potential to upend the massive residential real-estate industry. We are deeply honored to be partnering with the company and look forward to embarking on this journey together. Welcome to the Battery family, Flyhomes!
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*Denotes a past or present Battery portfolio company. For a full list of all Battery investments, please click here. No assumptions should be made that any investments identified above were or will be profitable. It should not be assumed that recommendations in the future will be profitable or equal the performance of the companies identified above.
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