Boston-based alternative home equity tapping company Hometap announced Wednesday that it has secured $100 million in new financing. The capital raise includes new San Francisco-based investor ICONIQ Capital, LLC as well as Hometap’s current investors General Catalyst, G20, Pillar and American Family Ventures, the venture arm of AmFam Insurance.
“We are thrilled to be investing with Hometap,” said Nugi Jakobishvili, ICONIQ’s Chief Investment Officer in a press release. “As investors, it’s rare to find opportunities with the combination of an attractive asset profile, a gifted management team, and the potential to provide meaningful economic benefits to households across the country. Hometap’s deep bench of high quality, high integrity professionals has created an exceptional platform that helps align homeowners and investors. They are incredibly well-positioned to lead the growth we are witnessing in the market.”
With this additional financing, Hometap plans to continue its previously-announced plans for a nationwide expansion, specifically in hopes of increasing its total reach to approximately 75% of American homeowners. They hope to reach that percentage by adding 2 additional states in the next few weeks, with hopes of tripling that number of states in the next 18 – 24 months, according to CEO Jeffrey Glass in an email to RMD.
The funds will also be used to refine its platform capabilities and to grow its cross-functional team, with hiring currently being particularly focused on its homeowner accounts team and its in-house data science and analytics teams.
“[These will] help us further refine our proprietary financial models and forecasting tools, enabling us to hone our underwriting criteria and make better-informed investment decisions,” said Glass. The greater ability this new financing will bring to the expansion of Hometap’s business is very encouraging, he added.
“We’re thrilled to have the financial support of such a diverse group of asset-backed and venture investors who can further propel Hometap towards helping millions of Americans free up liquidity from their homes without taking on more debt,” Glass said in a statement.
Hometap offers its customers investments in their home price’s appreciation as a method to access home equity, which serves as an alternative to debt-based lending. CEO Jeffrey Glass previously referred to the company’s offerings as “reverse mortgage-adjacent” in an October interview with RMD, and hopes to establish firmer ties with the reverse mortgage industry in the future, he said.
“I think we’d like to build some of those relationships,” Glass told RMD in October. “We’ve had a few inbound calls from folks wanting to explore [those kinds of possible arrangements]. I do think that there is a good place for us to partner with reverse mortgage companies, because again, we do things that they don’t, and vice versa. We tend to focus on a different segment of homeowners than they do.”
He elaborated saying that there could be potential customers who may not be able to qualify for a reverse mortgage while they can qualify for Hometap, while also saying there could be situations where a Hometap investment could co-exist with a reverse mortgage.