The company, about two years old, saw the investment from Brendan Dickinson of Canaan Venture Partners with participation from Comcast Ventures and First Round Capital. Josh Kopelman has been a mentor through the company’s early years, and First Round invested a $750,000 seed round that went unannounced, cofounder and CEO Justin Goldman told Technical.ly.
RenoFi aims to help lenders and potential loan seekers who want to start a home renovation project. Many people who have recently bought a home want to start a home renovation to increase the value of their property. But if they didn’t put 20% down or haven’t lived there for long, they don’t have a lot of equity to tap, Goldman said.
About 15% of people starting a home renovation will finance the project, while everyone else uses cash, he said.
“They’re forced to do financially stupid things, like borrow from their 401k, or drain their emergency savings,” Goldman said.
Folks might then tackle renovation projects one by one, which is more expensive in the long run and means that homeowners are constantly living in a state of construction. RenoFi’s fintech platform, used by lenders, assesses the credit underwriting, evaluates the applicant’s financial background and runs a renovation underwrite.
It looks for the feasibility of the renovation plans, and performs reference checks on the homeowners, insurance and proposed contractor. By looking at the post-renovation value, homeowners are able to borrow more money at the lowest possible rate.
“The most important thing we do for banks, lenders, homeowners is identify if the project is valuable,” Goldman said. “Do the scope of the project and the budget line up?”
RenoFi first worked with Ardent Credit Union in Fairmount and has, over about the last year, expanded to working with lenders across the country.
“RenoFi enables us to fill a need that isn’t being met with traditional home improvement financing options,” said Rob Werner, president and CEO of Ardent Credit Union, in a statement.
Cofounders Goldman, Robert Shedd and Lee Miller are all Philly-area based, as is half of their staff of about 15. The rest are based in cities across the world, but the team is 100% distributed. The company was founded in January 2018, but Goldman said the team really “found their groove” in the last few months, linking up with more lenders and bringing more team members aboard.
The enterprise software now works with lenders in 49 states, and pandemic times have actually brought in their best months, as more people spend increased time at home. It’s also changed what folks have in mind for their perfect home, Goldman said — some people are realizing their current floorplan doesn’t actually work for them.
All in, the company’s now seen more than $7 million in investments, and the Series A will allow the team to grow its lender options, tech team and marketing, Goldman said.
“Homeowners only typically do this once, maybe twice in their life,” Goldman said. “They are not experts in it, and having a trusted set of third-party eyes is invaluable.”
Goldman and Shedd had worked as CEO and CTO, respectively, of Zoomer, the B2B food delivery startup they cofounded in 2014. Zoomer “had all the trappings of being a Philly tech sleeper hit” before it suddenly shut down in January 2017, as Technical.ly wrote that February when we discovered Grubhub had brought on 30 to 40 developers and engineers from the formerly Navy Yard-based team. Madison, Wisconsin-based EatStreet partially acquired the company’s operations in 10 markets across the country. Both execs moved to Grubhub following their startup’s demise in early 2017 and worked there as VP of strategy and VP of product until November 2017.
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