FlyHomes is determined to shake up the real estate experience for buyers, sellers and agents. Born out of Stephen Lane and Tushar Garg, both former Microsoft employees, the Seattle-based real estate startup just raised $17 million to finance its new Cash Offers program, grow the team and drive new markets expansion.
The funding round was led by led by Alex Rampell of famed Silicon Valley VC firm Andreessen Horowitz, with participation from e-commerce pioneer Mark Vadon and Shasta Ventures.
"We are always on the lookout for businesses that are on a mission to provide consumers a better level of service for a lower cost than traditional models," said Rampell ."The real estate industry is at a critical inflection point and we see the vertical approach that FlyHomes is pioneering as a dramatic improvement to the home purchase experience for home buyers, sellers, and agents. We're excited to partner with them to expand upon their vision."
FlyHomes is an online real estate brokerage and platform that turns pre-qualified clients, who have down payments as low as 5%, into cash buyers by purchasing homes, and using cash from its debt facilities, on their behalf.
If the seller accepts the offer, FlyHomes allows the seller to move out when it’s convenient within 60 days. FlyHomes then resells the home to the original interested buyer once financing has closed – typically around 30 days later. The startup earns a standard buyer’s agent commission-usually about 3 percent- from the home seller and there are no additional costs to the seller or listing agents.
(FlyHomes Seattle Team, Sept. 2017, Photo courtesy of FlyHomes)
Lane and Garg launched the company in 2015 in Chicago but most of the team operates out of Seattle, a notoriously difficult housing market driven by low inventory and high demand. The idea came out of Lane's experience buying a house who desired to create a millennial-focused home-buying platform after noticing a trend – home sellers were often choosing all-cash offers, even if others were willing to pay more with traditional financing.
“In today’s market, sellers are regularly taking less than the highest offer because an investor has cash, which gives them a competitive advantage over traditional home buyers,” said Lane, who is also the CEO. “We give any buyer that is able and willing to purchase a home an equal footing – our cash, which helps our clients win, but also helps sellers because they don’t have to sell their home at a discount to an investor in exchange for certainty.”
Prior to FlyHomes, Steve worked on the Market Intelligence team for Windows at Microsoft, and prior to that was an Associate on the Treasury Markets team at J.P. Morgan’s Investment Bank.
“We believe in the long-term that buyers, sellers, and listing agents will all win if we’re successful at turning every home buyer into a cash buyer in seller’s markets,” said Garg who is the COO. “Our focus is on today though, and our mission is simple: we want to give every one of our client’s the best possible shot at winning their dream home.” Prior to FlyHomes, Tushar was a Program Manager for the core ranking team for Bing search at Microsoft.
FlyHomes has grown from 1 employee in July 2016, to over 60 employees in May 2018, and has also expanded from their original Seattle market to Chicago, Boston, and the San Francisco Bay Area.