Amid a housing shortage and resulting renovation boom, RenoFi just announced a $14 million funding round led by an existing investor Canaan Venture Partners. The Philadelphia-based fintech company serves potential lenders and loan seekers who want to start a home improvement project.
The company, co-founded by former Zoom in execs, previously announced a Series A in 2020. But co-founder Justin Goldman Recount Technically that in hindsight, this round of funding felt more like the seed of the company – the product hadn’t launched yet at the time and they hadn’t hired any team members.
But since 2020, the past RealLIST Startups laureate has grown rapidly. By the end of that year, it had about 20 team members and it now operates with about 80 employees fully distributed across the United States and around the world. Goldman and co-founders Robert Shedd and Lee Miller are all based in the Philadelphia area, as are a dozen other members of their team. They meet occasionally in an office they occupy at Fitler Clubbut RenoFi was created as a distributed company, Goldman said.
This recent funding round, which also welcomed new investors NYCA Partners and CMFG Ventures, will be used to scale its business operations and product roadmap. RenoFi’s fintech platform used by lenders assesses credit underwriting, assesses the applicant’s financial history and manages a renovation underwriting. He researches the feasibility of the renovation plans and checks the references of the owners, the insurance companies and the proposed contractor. By looking at post-renovation value, homeowners are able to borrow more money at the lowest rate possible, according to the company.
Goldman said he and the other co-founders discussed with their advisers at Canaan when they could pursue a Series A, and the company stepped in to lead the round. The whole thing, including NYCA and CMFG coming in, went faster than they thought.
“I felt lucky to be able to get back to work and focus on the business fairly quickly,” Goldman said. “And happy to have that support.”
The company was launched in the midst of a cycle of housing shortage, and that trend has continued as America’s largest demographic, Millennials, ages to buy their first home. A recent estimate showed that the median home age is 40 years, and with low housing inventory, many people are looking to remodeling their homes rather than buying, Goldman said.
“More owners than ever are deciding to ‘love it’ rather than ‘list it,’ to borrow HGTV terminology,” Goldman said. “They have no choice, there is nothing to buy. And with the work-from-home movement continuing, people need their homes to work for them.
The RenoFi platform now has lenders offering three types of loans, Goldman said: renovation home equity loans, renovation refinance loans and unsecured renovation loans. It works with banks and credit unions across the country, with 49 states included in its territory.
The capital will be used to “further develop the platform that powers it all,” Goldman said, with plans to invest in its engineering and products. Currently, the 80-person team is nearly half Product, Engineering and Data, with Operations and Sales coming next. (See open positions here.)
“Every other major purchase we make in our lifetime comes with a smart and easy financing solution. To buy a car ? Get a car loan. To buy a house ? Get a mortgage. Back to school ? Get a student loan,” Goldman said. “Each of them is a financial product specially designed for a specific use. Remarkably, until now, this did not exist for home renovations. We decided early on that the best way to really help homeowners was to build the rails that major US lenders needed to bring this new product category online.