Ribbon, a homebuying startup that offers a unique proposition to its customers, currently operates in eight markets in four states, but the company has big plans for expansion now that it has secured more than $300 million in new funding.
Ribbon, which began operating in the Carolinas in the last few years, works with homebuyers to ensure they can buy the home they want on their timeline, rather than waiting for their mortgage to be approved and processed.
Basically, if a homebuyer can’t close on their mortgage in time to buy the home they want, instead of losing out on the house, Ribbon will buy the house with its own funds and reserve the home on their behalf for as much as six months.
The buyer then rents the home from Ribbon until they get their financing in order.
The program offers appeal for both sides of the deal, as sellers get a guaranteed cash offer and buyers don’t lose the house they want because of delays in funding.
Last year around this time, Ribbon raised $225 million in a combination of debt and equity financing to grow its business, and now the company has raised even more money as it seeks to continue that growth.
Ribbon announced recently that it raised $330 million in a combination of debt and equity financing, which it plans to use to expand to 20 markets across ten states by the end of 2020.
According to Ribbon, the company closed on a $30 million Series B round of funding led by Greylock, with participation from all of the company’s previous investors, including Bain Capital Ventures, NFX, and NYCA, along with new investor Thomvest Ventures.
NFX is an interesting name among Ribbon’s new investors. NFX is a private capital firm that’s led, in part, by former Trulia Founder and CEO Pete Flint.
Flint led Trulia through its merger with once-rival Zillow, eventually serving on the board of the combined company, Zillow Group, for two years after the sale. Flint left Zillow in 2017, and is now helping to lead NFX as one of its managing partners.
And, according to Flint, Ribbon’s business model and team are big draws for investors.
“Since our initial investment two years ago, the Ribbon team – which is stacked with talent and industry expertise – has built a solution that removes uncertainty from the transaction, making it easier for buyers, sellers, and agents,” Flint said. “Ribbon is proving that superior technology and data plus capital is what it will take to truly transform the real estate industry. As Ribbon continues to expand across the US, buyers and sellers are the real winners.”
Ribbon currently operates in eight markets across four states – Charlotte, North Carolina; Raleigh, North Carolina; Nashville, Tennessee; Charleston, South Carolina; Greenville, South Carolina; Memphis, Tennesse; and Knoxville, Tennessee, and Atlanta.
“Buying a home – especially when you want to sell a current home and level up – can be a frustrating and stressful experience. By bringing technology to the homebuying experience, Ribbon makes it much easier for all parties involved,” said Josh McFarland, partner at Greylock.
“Since leading the seed round, the Ribbon team hasn’t slowed down when it comes to innovating, and Greylock is thrilled to continue our support as the company builds new, transformative technology for the real estate industry and expands into more markets,” McFarland added.
Beyond the $30 million in new equity funding, Ribbon also secured a debt facility with Goldman Sachs that provides current financing capacity to $300 million and may be increased by an additional $220 million, upon the satisfaction of certain conditions.
“Homebuyers, home sellers, real estate agents and lenders are all enthusiastically working with Ribbon to streamline the real estate transaction and deliver a frictionless buying and selling experience,” said Ribbon CEO Shaival Shah.
“We’re grateful for the confidence our investors have shown in our business model with this round of funding, and excited about the opportunity to bring our products and services into new markets and design new product solutions,” Shah added. “We are expanding our platform to help even more families who have homes to buy and sell and families who are buying their first home.”
