Venture Capital: Home Equity Financier Noah Goes From a $5M Round To $150M in Seven Months

April 23, 2020 | News, Real Estate, Venture Capital
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Rising unemployment due to the coronavirus pandemic has Americans worried about their finances. Noah can help.

San Francisco based startup Noah allows homeowners to cash their home equity in these difficult times. The startup just received $150 million in the form of platform capital which it will use to invest in homes as a portion of their equity. (Crunchbase)

Last September, Noah, which previously called itself Patch Homes, raised a Series A round worth $5 million. It is quite a feat to raise 30X fresh funding within seven months. This may be a testament to Noah’s growth: Home equity investments on the platform are 4.5X from just a year ago, and 11.5X from two years ago.

The latest financing came from unnamed institutional investors, including pension funds, according to founder Sahil Gupta.

How it works

Noah partners with homeowners to provide home equity sharing up to $350,000. In return, it will pay up-front financing which homeowners can use any way they want.

Homeowners need to pay no interest or monthly interest. Instead, Noah gets a share in the future appreciation of the house.

Homeowners can pay the company back in 10 years by selling or refinancing the home. If the home increases in value, Noah makes money. If it loses value, Noah shares the losses with the owner.

Currently, Noah is financing home equity in California, Washington, Oregon, Utah, and Colorado. To qualify homeowners must own at least 25% of their home equity and have a credit score of 600+.

Furthermore, prequalification is completed in less than two minutes. Interested homeowners can then apply. They can hope to received funds in just 15 days.

Noah’s debt-free financing

“We see our homeowner partners as more than just a credit score–our model leverages 80 billion data points across more than 60 different variables in order to obtain a holistic understanding of each investment,” said Rahul Parulekar, chief investment officer. “This approach is a game-changer for investors, as it provides access to a historically stable asset class and a long-term growth opportunity for them to invest in equity instead of debt.”

Related Story:  Real Estate: iBuyer Zillow Freezes Home Buying; Expert Warns of Housing Market Shutdown

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