A company that provides homeowners with access to cash from the equity they’ve built up in their residences without utilizing any home-equity lending has just lined up nearly $12 million in financing. The firm’s chief executive officer see’s exponential growth ahead in the coming years.
Splitero provides a home-equity investment product that is a new financial instrument offering homeowners access to the equity built up in their homes by providing a lump sum of cash in exchange for a share of the property’s appreciation. No debt or monthly payments are involved.
“Homeowners continue to be underserved with traditional financial products to access their home equity,” today’s media release stated. “As existing home sales continue to fall and climbing interest rates trap many homeowners with low-priced mortgages, Splitero is uniquely positioned to offer homeowners a better solution.”
On Tuesday, the San Diego-based fintech announced that it secured an $11.7 million Series A funding round.
“The completion of our funding round, in the current economic environment, is a testament to our team’s hard work and tremendous growth this year,” Splitero Co-Founder and CEO Michael Gifford stated in the news release.
The lead investor was Fiat Ventures, while Gemini Ventures, Joint Effects, PBJ Capital, Permit Ventures, Dream Ventures, Goodwater Capital, Spark Growth Ventures, and Oyster Fund also participated in the funding round.
Alex Harris, who is the general partner for Fiat Ventures said in the announcement that Splitero is serving a critical need in today’s housing market by helping homeowners achieve unique and flexible solutions that help them reach their goals and achieve financial wellness.
“We are elated to partner with them to advance their transformative approach to more markets,” he said.
The latest round follows $5.8 million in seed funding that was led by Gemini and included participation by Fiat, Permit and Redwood Trust.
“Raising a series-A in this market is a feat in and of itself,” said Mark Hanson, who operates HomeEquity.Exchange, a real estate co-investment platform, in a written statement. “This is fantastic news by a relative newcomer in the space that does a lot to put our sector on the map, after the legacy [home-equity agreement] regime has done such a good job for so many years purposely keeping it off the radar.”
As is the case with traditional first mortgages, licensed third parties complete property valuations, Gifford said in a written statement. Home-equity investments by the company are recorded on the property’s title, similar to a mortgage.
A consumer credit report is obtained in order to verify assets and debts, Gifford explained. Any collection balances over $500 need to be paid off.
But with no income requirements, no minimum credit scores and no monthly payments, the product could replace home-equity lending for many homeowners.
Splitero says it has facilitated more than $1 billion in financing since Gifford and co-founder, co-owner and COO David Zvaifler launched the business in August 2021.
“While the market is growing quickly, substantially fewer [home-equity investments] are originated annually compared to HELOCs,” Gifford said in the written statement. But he noted, “We expect this market to grow exponentially in the coming years as it is a better option for many homeowners to access their home equity.”