Despite the global pandemic, median home prices have steadily increased in the US over the last several years. As the pandemic affects the economy, some homeowners may need to capitalize on the equity in their homes. EasyKnock provides a seamless, innovative solution so that people don’t need to make the difficult decision between staying in their homes and maintaining their financial wellbeing. EasyKnock’s signature sales leaseback program, Sell and Stay, allows people with homes valued between $100K – $1M to sell their home to EasyKnock and then lease it back as a tenant. EasyKnock’s AI-powered underwriting engine identifies qualified homeowners and transactions can be completed within 30 days. At the end of the lease term, the homeowner-turned-lessee has the option to repurchase the home. Sales leasebacks have been popular institutionally with REITs and for commercial real estate but EasyKnock makes it accessible for residential homeowners. The service is now available in all 50 states.
AlleyWatch caught up with CEO and Cofounder Jarred Kessler to learn more about how EasyKnock is providing flexibility to homeowners, the future of the housing market, and the company’s recent funding round, which brings the total funding amount to $36.7M in equity funding. The company has also raised an additional $303M in debt to fund the acquisitions of the homes.
Who were your investors and how much did you raise?
EasyKnock closed $20M in Series B funding led by Blumberg Capital and QED, with contributions from FJ Labs, Correlation, Moderne, 7BC, and Interplay.
Tell us about the product or service that EasyKnock offers.
EasyKnock’s mission is to provide new and innovative ways for homeowners to access their home value to achieve their goals. Sell and Stay is EasyKnock’s revolutionary sale-leaseback program in which we buy your house and lease it back to you as a tenant. Get the time and money you need to reach your goals without having to move. Then, when you’re ready, you choose whether you want to repurchase the home or move into a new one. Your life, your terms. Additionally, MoveAbility® is EasyKnock’s reinvention of the moving process. Access the value of your home now by selling it to us. You get to stay living in the house while paying rent until you’ve found your next home. You’ll have the money you need to fund your dream home without the rush of a typical move.
My background is actually in capital markets, but I had a desire to be entrepreneurial and help people. As many know owning a home is very inflexible, with few options for homeowners and I felt I could bring my background in capital markets to an industry and directly help people. EasyKnock was built to reinvent homeownership and help homeowners free up liquidity, providing our customers with more options and flexibility.
How is EasyKnock different?
There is no other company that has created a new homeownership platform. Others are creating new products or new types of transactions whereas we want to change the landscape in the housing market. We give our customers all the appreciation.
What market does EasyKnock target and how big is it?
EasyKnock provides new ways for homeowners to convert their equity to cash by utilizing an AI-driven qualification and underwriting engine to identify suitable customers and close the sale quicker than banks and loans.
Unlike traditional mortgage refinancing options, EasyKnock is a buyer, not a lender, and can, therefore, provide solutions for a broader range of US homeowners. Through its two principal programs – Sell and Stay and MoveAbility – and partnerships with three of the top U.S. mortgage lenders for a unique referral pipeline, EasyKnock helps homeowners live better by offering them options and flexibility. Our market is $6T of equity or around 25% of the housing market.
How has COVID-19 impacted the business?
Like many, COVID-19 has impacted our business. EasyKnock is in a strong position to help our customers now more than ever. We’re able to ensure customers can sell their houses during a downturn without any disruption. We are helping customers to get the liquidity that they need in a time when it may be needed most. But as a whole, the industry will see a bit of a slowdown as things start to trickle down into the economy.
What was the funding process like?
The funding process was different this time due to COVID-19 as we were unable to conduct in-person meetings and the interest-areas that VC’s were focused on were impacted – many shifted away from eye-catching technologies. Further, I was actually battling COVID-19 myself during three weeks of the fundraising process, so that impacted my energy levels and perspective.
The goal of this funding is to enable EasyKnock to expand as quickly as possible through new products and help us to invest in technology, new channels, and marketing, all of which will enable the company to reach more people and help a wider customer market.
What are the biggest challenges that you faced while raising capital?
I suffered from COVID-19 during our funding, which made the process a bit more challenging. However, the company and my team depended on me, so I charged ahead.
What factors about your business led your investors to write the check?
We are countercyclical, and we have smart investors who know how this period will play out and believe we have the foundation to massively change the housing landscape and support people.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Survive at all costs to live to fight another day. Always be honest with your employees and have a plan for the worst. There is always a path, the challenge is finding it. Hard work and strategy are important but thinking outside the box is the key.
Always be honest with your employees and have a plan for the worst.
What are the milestones you plan to achieve in the next six months?
Through our funding, EasyKnock will further enhance its technologies while scaling product offerings and adding to its employee headcount.
Where do you see the company going now over the near term?
We are at a turning point across the industry and country. Over the past 4 months, people have been saving money, through the stimulus check, government loans, with an increased sense of solvency, which was good, but this is quickly running out. As the PPP loan dissipates, and people have less money to spend, this fluctuation trickles into the economy.
This means that the housing market will see a major switch, with large lenders for example having limited and stricter criteria – which means EasyKnock has a great opportunity to come in and especially help the middle-class, a demographic that is increasingly forgotten by larger lenders.
What’s your favorite restaurant in the city?
Sammys Roumanian, it’s full of fun, unhealthy food, and edge.
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