Subscribe to the Crunchbase Daily
Austin-based REX last November raised $40 million in what it described as a C1 round. That financing was an add-on from its $45 million Series C in January 2019.
London-based Lion Capital’s new investment brings the startup’s total raised since its inception in late 2015 to $140 million, according to Crunchbase data.
In a statement Lion Capital Partner Matthew Nordby said his firm believes the REX brand and service offerings are scalable to serve an expanded audience.
“REX Homes was made for this exact moment where families need safe and secure options, and demand greater value when selling their asset or buying their next home,” he added.
A look at growth
REX says the new financing follows a high-growth year for the company. In 2019, the startup said its listings grew about 160 percent. And its revenue surged 180 percent compared to the year prior.
The COVID-19 pandemic is only fueling demand for its services, the company said.
From January to April 2020, REX said it has helped consumers move three times more homes into escrow compared to the same period in 2019. For a quarter of the homes in escrow, the buyers only toured the home virtually, it added.
And from January to March 2020, REX saw its virtual tours surge by 1,000 percent “as consumers looked for safe options to shop for homes.”
Once a buyer has found the home it would like to purchase, REX says its “fully automated” back office can handle the entire transaction, including mortgage, escrow and insurance, without requiring any in-person meetings.
REX currently has 220 full time employees,10 part time workers and approximately 245 gig workers (which it describes as a combination of mostly “Associate Agents” and a few IT-related contractors).
That’s up from September 2019, when it had 185 full-time employees, three part time workers and about 220 gig workers.
REX currently has 36 open roles, saying that it is focused on growing within targeted markets. As of April 2020, REX is operating in 17 states nationwide, including Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Massachusetts, Nevada, New York, New Jersey, North Carolina, Oregon, Pennsylvania, Texas, Virginia and Washington DC.
The real estate tech sector
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. If a buyer purchases an MLS home through REX Homes, the company returns 50 percent of the fee to the buyer.
As part of a continued effort toward social good, REX Homes said it is also working with World Housing to fund the construction of a new home for every 50 homes sold on the REX platform. REX Homes is also currently contributing to a World Housing “Girls to Grannies” community in Cambodia by building a local school and 15 homes for needy families, with an additional 20 future homes slated to be built this year. In addition, CEO and co-founder Jack Ryan said he has dedicated his ownership in REX Homes to building homes and schools for children who have lost access to their parents.
Illustration: Dom Guzman