7GC Invests in Roofstock's $240m Series E Financing Round
In March 2022, 7GC announced it has invested in Roofstock’s Series E, a follow-on to its Series D, closed from Fund I in November 2019.
The round was led by SoftBank Vision Fund II, with participation from other existing investors. These include Khosla Ventures, Lightspeed Venture Partners, Bain Capital Ventures, Canvas Ventures, Citi Ventures, First American Financial, Expanding Capital, JLL, SVB Capital,Touchdown Ventures, Newton Investment Management, Pegasus Technology Ventures, CAZ Investments, Moving Capital (aka Uber Alumni Investment Club) and RO1, a series of Doordash Angels.
Roofstock is a leading, end to end, online retail, and institutional focused, investment platform for single-family rentals (SFR). Its digitally enabled platform provides resources to value, buy, manage and sell inventory online in this originally fragmented $4 trillion market in the USA. Roofstock has facilitated more than $5 billion in transaction volume, more than half of which came from the last year alone and 15,000 homes under management in 70 markets.
The platform allows any investor to individualize the services and solutions required based on investment objectives. The investment offering has also been scaled to allow the build of bespoke SFR portfolios, for which Roofstock has scaled property management services. In 2021 the company purchased more than 3,700 homes on behalf of its institutional clients, representing more than $1.2 billion in assets. This has translated the business from a transaction-based platform to a full-stack technology platform.
The funding round will be used to accelerate growth by doubling down on innovation including expanding tokenisation through Roofstock One which is a managed fund service, whilst doubling team size and building out its internal incubator Roofstock Labs. In addition, it will expand property management with bank services through Stessa. Roofstock will also expand into new markets such as short-term rentals and conduct further strategic M&A.
7GC made the investment in Roofstock because it aligns with its investment focus of identifying emerging category leaders that disrupt offline sectors. Roofstock has created a first in kind transparent, frictionless, and liquid marketplace in the highly attractive SFR segment of the US residential real estate market.The offering represents a step function increase of experience and quality for both institutional and retail investors. The company has proven the ability to consistently grow volumes, while simultaneously diversifying their revenue stream between immediate pure transaction revenues, long term ongoing recurring management fee revenues and medium-term advisory project-based revenues. This has translated into revenue growing 3x in 2021 (+200% yoy).
In the company press release, Gregor Watson, Co-Founder & Chairman of Roofstock stated:
"Roofstock has built the modern real estate technology and financial rails to unlock the massive potential of this asset class for investors everywhere. It has expanded beyond a marketplace for trading homes and has become a critical platform for anyone on a journey to generate wealth through real estate."
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