Despite the current market conditions, U.S. home ownership is skyrocketing. At 68%, it is at the highest level since the third quarter of 2008, and almost 4% higher than a year ago. New home sales are trending up YoY, and June home prices saw the largest monthly gain in 7 years. With mortgage rates remaining low, Americans are reconsidering how (and where) they live and work.
These secular trends are being reflected in the capital markets, with companies that facilitate residential real estate transactions as the beneficiaries. Intercontinental Exchange (ICE) recently acquired Ellie Mae (enterprise software for the mortgage finance industry) for $11b. Rocket Mortgage gained over 20% in its first day of trading, while Porch announced its plans to combine with PropTech Acquisition Corp (yes, another SPAC) for $523m.
Zillow and Redfin reported their quarterly earnings as well, revealing surprising resiliency in residential real estate. Both saw significant year over year growth late in Q2, after the real estate market had frozen up in April - with Zillow’s CEO synthesizing the secular trends as a “Great Reshuffling” in America.
Clearly, the pandemic is accelerating innovation to help people safely and digitally shop, purchase, sell, finance, rent, or invest in real estate. Who knows - by the end of the year we might be writing this newsletter from a prairie in Minnesota. With the right Zoom background, only we will know the truth!
Little House On The Prairie
ICE buys Ellie Mae for $11b allowing ICE to expand its own mortgage-servicing business - More than 40% of annual U.S. mortgage originations are processed using Ellie Mae software. That gives Ellie Mae insight into trends such as borrowers’ credit profiles and changing underwriting standards. Read more
Quicken Loans parent’s stock rises as company looks to build ‘the Amazon for financial services’ - Quicken Loans rose to become the country’s largest mortgage lender in recent years following the debut of Rocket Mortgage, its digital mortgage application process. Rocket Mortgage proved especially popular among millennials, Walters said, who now form the largest generation of home buyers in the market. Read more
Zillow stock spikes after crushing Q2 expectations; CEO says ‘people’s desire for home is resilient’ - Fellow Seattle real estate giant Redfin also beat estimates for its quarterly earnings last week as the U.S. housing market rebounds. Redfin and Zillow are riding a trend of increased home ownership driven in part by record-low mortgage rates. The U.S. Census reported last week that home ownership rates increased year-over-year from 64% to 68%, the highest level since 2008, and one of the largest increases in history. Read more
US 30-year mortgage rate falls to 2.88%, hitting a record low for the 8th time this year - The housing market has been one of the few areas to show continued strength in the recovery from the coronavirus pandemic recession. Where the labor market recovery has slowed and consumer sentiment is waning as new COVID-19 cases tick up, the housing market has had a strong rebound. Read more
Ayoconnect - Indonesia based bill payment startup raised $5m in pre-Series B funding from BRI Ventures, Kakaku, and Brama One Ventures. Read more
Bnext - Madrid, Spain based challenger bank raised $13m in additional Series A funding led by DN Capital, Redalpine Venture Partners, and Speedinvest. Read more
Buckle - Jersey City, N.J. based insurer for ride-hail drivers and other gig economy workers raised $31m in Series A funding co-led by Eos Venture Partners and HSCM Bermuda. Read more
CloudPay - U.K. based payroll provider raised $35m in growth funding led by Runway Growth Capital. Read more
Kompany - Vienna, Austria based RegTech platform for anti-money laundering and business know-your-customer raised €6m in new funding led by Fairway Global Investment. Read more
Orum - New York based platform to help financial institutions move money and predict funds availability raised $5.2m in Seed funding led by Homebrew. Read more
Proper - San Francisco based AI-powered accounting and bookkeeping service for property managers raised $4.8m in Seed funding led by MetaProp. Read more
REDD Intelligence - New York based online market intelligence platform focused on fixed income and emerging markets news raised $5.8m in funding led by Nassau Point Investors. Read more
Splitit - New York based global payment platform that enables shoppers to pay installments via their credit cards raised $71.5m in a private placement and share purchase plan (“SPP”) from Woodson Capital Management and other undisclosed investors. Read more
sync. - London based account aggregation and personal financial management service raised £5.5m in Seed funding. Read more
TaxScouts - U.K. based tax preparation startup raised £5m in Series A funding led by Octopus Ventures. Read more
Volante Technologies - Jersey City, N.J. based cloud-based payments and financial messaging provider raised $35m in growth funding led by Wavecrest Growth Partners. Read more
Zibo - Redwood City, California based platform for independent landlords to manage finances raised $10.5m in Seed funding led by Canaan Partners. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Saturday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.