REX, an Austin-based licensed residential real estate brokerage using AI and big data, has raised another $40 million in what it describes as a “C1” round.
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A group of private investors including Sun Microsystems co-founder and former CEO Scott McNealy; Richard “Dick” Schulze, founder of Best Buy; Gordon Segal, founder of Crate and Barrel; Amit Singhal, former SVP of search at Google, among others, contributed to that round. It is not clear if they all participated in the “C1” round as well.
REX, which relocated from California to Austin earlier this year, currently operates in 23 cities in 17 states. Its mission, which matches that of a slew of other startups focused on disrupting the real estate industry, is to “take the stress and confusion out of buying and selling homes.”
How It Works
There are so many real estate tech startups these days that it can be difficult to differentiate them. Similar to Redfin, REX charges a lower commission (2 percent) than most traditional real estate brokerages, which typically charge 6 percent.
Using data science, machine learning and artificial intelligence, the startup claims to be able “to price homes more accurately than traditional brokerages.” It also pays its agents a salary, as opposed to working with them as contractors.
REX says it helps people throughout the home buying and selling process, with things such as escrow, titling, mortgages and shopping for insurance. Its revenue climbed 150 percent in 2018 compared to the year prior, according to CEO Jack Ryan. So far in 2019, revenue and listings are up by 300 percent, he said. Headcount is higher too. Rex currently has about 270 employees now compared to around 100 at the beginning of the year.
He expects the site will have listed about 3,000 homes throughout all of 2019. Since its launch at the end of 2015 in Southern California, REX has represented homes at a combined value of over $2 billion, according to the company. In the past year, it has expanded to cities in Oregon, Florida, Illinois, Pennsylvania, Washington, D.C., Arizona, Nevada, Virginia, Maryland and Massachusetts. Prior to 2019, REX operated only in California, Texas, New York and New Jersey.
REX has a social good component too (which I personally love). It says that for every 50 homes it sells, REX builds one new home for a family in need.
Ken Griffin, the founder and CEO of financial securities firm Citadel LLC, was one of the leaders of the latest round.
“It is terrific to see the advancements that have driven down the cost of trading stocks and bonds being applied to the real estate markets,” Griffin said in a written statement. “I look forward to supporting REX as it uses predictive analytics and transformative technology to make the dream of home ownership a reality for far more Americans.”
Looking ahead, the company plans to use the money toward expanding nationally and “to make available additional services like mortgage and insurance broking, escrow, title and home services in the markets where we don’t currently have them,” according to Ryan.
As mentioned, it seems there’s no shortage of real estate tech or real-estate related startups raising money. In recent months alone, we’ve covered Qualia raising $55 million for its real estate closing software and Divvy Homes raising a $43M Series B round to help in its mission to help more Americans “move from renters to [home]owners.”
Earlier this year, we reported on some massive funding rounds from the likes of Knock and Compass. And in July, we covered Fifth Wall Ventures raising $503 million for its second fund to invest almost exclusively in real estate tech companies.
Illustration: Dom Guzman