Amid a housing shortage and resulting boom in renovations, RenoFi just announced a $14 million round of financing led by existing investor Canaan Venture Partners. The Philly-founded fintech company serves lenders and potential loan seekers who want to start a home renovation project.
The company, cofounded by former Zoomer execs, had previously announced a Series A back in 2020. But cofounder Justin Goldman told Technical.ly that looking back, that round of financing was more like the company’s seed — the product wasn’t yet launched at the time and they hadn’t hired any team members.
But since 2020, the past RealLIST Startups honoree has been growing rapidly. At the end of that year, it had about 20 team members, and it’s now operating with about 80 fully distributed employees across the US and the world. Goldman and cofounders Robert Shedd and Lee Miller are all Philly-area based, as are about a dozen other members of their team. They meet occasionally at an office they hold at Fitler Club, but RenoFi was established as a distributed company, Goldman said.
This recent 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, 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, per the company.
Goldman said he and the other cofounders had been talking to their advisors at Canaan about when they might pursue a Series A, and the firm jumped in to lead the round. The whole deal, including bringing in NYCA and CMFG, moved faster than they thought they could.
“I felt lucky to be able to get back to work and focus on the company pretty quickly,” Goldman said. “And happy to have that support.”
The company launched amid a cycle of housing shortages, and that trend has continued as the US’ largest demographic, millennials, are aging into buying their first homes. A recent estimate showed that the median home age is 40 years, and with low housing inventory, many people are turning to renovating their home over buying, Goldman said.
“More and more homeowners than ever are deciding to ‘love it’ over ‘listing it,’ to borrow from some HGTV terminology,” Goldman said. “They don’t have a choice, there’s 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 cash-out refinance loans and renovation unsecured loans. It works with banks and credit unions around the country, with 49 states included in its territory.
The capital will go toward “further developing the platform that’s powering all of this,” Goldman said, with plans to make investments into its engineering and product side. Currently, the 80-person team is nearly half product, engineering and data, with operations and sales as the next largest. (See open roles here.)
“Every other major purchase we make in our life has a smart and easy financing solution attached to it. Buying a car? Get an auto loan. Buying a house? Get a mortgage. Going back to school? Get a student loan,” Goldman said. “Each of these is a purpose-built financial product for a specific use. Remarkably, until now, this has not existed for home renovations. We decided from the outset that the best way to actually help homeowners was to build the rails that America’s great lending institutions needed to bring this new product category online.”-30-