Real Estate Giant Knock Raises $220M, Cancels IPO Plans
Part of the traditional American Dream is to purchase and own property. Whether it be used to live out family life with a white picket fence or scale it into a short-term rental as a side hustle, the real estate market is a hot commodity.
Despite research showing that the housing market is worth a record high of $43.4 trillion, everyday consumers are struggling to purchase a home. This is due in part to low inventory with 19.5 percent fewer homes for sale last year than in 2020, according to CNBC.
Since 2015, real estate loan and purchasing startup Knock has been working to help consumers navigate the trials and tribulations behind purchasing a home. The company’s technology allows consumers to buy a new home without selling the one they currently own through a loan offering system.
Earlier this week, Knock announced it raised $220 million in a financing round led by Foundry Group. The round brought in $70 million in equity and $150 million in new debt that will be used to scale the platform’s offerings.
Built In last caught up with Knock in 2019 when it raised a $400 million Series B. Since then, it has hired Goldman Sachs to help explore IPO opportunities.
Last year, Goldman Sachs helped the company reach a valuation of $2 billion and enter an IPO agreement with “a reputable SPAC sponsor represented by Morgan Stanley,” according to a company statement.
However, the Covid-19 pandemic caused difficulty in seeing the public offering through.
“We were on top of the world and our mission was being fulfilled, or so we thought,” Knock CEO and co-founder Sean Black said in a statement. “Enthusiasm for SPACs started to wane and companies that went public via SPAC suddenly traded at an average of 39 percent below their highs.”
Instead of seeing the IPO through, Knock decided to focus on scaling. According to the company, it achieved double- and triple-digit growth last year in transactions. It also expanded from 14 to 70 markets nationwide.
“We will continue to partner with the industry to make all homebuyers power buyers. Being able to compete with cash buyers is more important than ever,” Black said about Knock’s latest funding round.