Home loan platform Hometap on Monday (Dec. 6) announced that it raised $60 million in fresh operating capital through a funding round that will help the company offer its services to more customers in new ways.
Hometap provides a loan alternative that taps into home equity without consumers taking on debt, by offering homeowners cash in exchange for a share of their home’s future value.
American Family Ventures led Hometap’s fundraising round, with participation from new and existing investors including Bain Capital, ICONIQ Capital, LLC, G20 Ventures, Pillar and General Catalyst. The funding round puts the total of Hometap’s operating capital raised at $95 million, according to the company’s announcement.
The money will be used to hire new employees, scale the company’s channel partner program, add new alternative financing plans and services and expand across the U.S., per the announcement. Hometap has made four times as many home equity investments in 2021 through Oct. 31 than it did in 2020 and doubled its headcount.
“I am excited about our growth trajectory and am truly grateful to our team for working tirelessly to put homeowners first as we continue to scale the business,” Hometap CEO Jeffrey Glass said in the announcement.
“This new funding will reinforce our ongoing efforts to build our talented team, rapidly expand our operations, and grow our partner programs and distribution channels,” he said. “We remain focused on delivering alternative financing solutions to more homeowners in need while continuing to provide the personalized service they’ve come to expect from us.”
Related: LendingClub on the Benefits and Potential Pitfalls of Automated Lending
PYMNTS research shows that 24% of U.S. consumers have used personal loans and increasingly sought debt repayment relief through hardship plans, under which borrowers could make interest-only payments or skip payments altogether.
Peer-to-peer (P2P) lending company LendingClub developed a digital solution for this new pocket of customers at the start of the COVID-19 pandemic. Many applicants are now seeking personal loans for personal and professional expenses, such as creating home offices, which requires data-driven solutions.
Because of its digital lending approach, LendingClub can use data already collected on existing customers to approve returning applicants more quickly. About half of them return for second loans. The data offers insights into consumer credit behavior through varying credit environments along with constant testing and evaluating marketing to servicing loans and managing fraud.
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