RenoFi is a company we were bullish on back when we led its seed round in June 2020, so I’m pleased to share that we’ve also led the company's latest $14M. We believe more than ever that RenoFi will become the platform powering the de facto financing products for home renovations, a $400B+ market that’s been massively underserved to date.
For every major purchase, there’s a financing product. You buy a house, you get a mortgage. The same goes for buying a car and getting a car loan. But when it comes to renovating a home, the usual suspects are cash-out refis and home equity loans (HELOC), and neither is actually built for renos.
Justin Goldman, Lee Miller, and Rob Shedd are building RenoFi to change that. The company’s renovation enablement platform provides a turnkey solution that empowers any lender to become a renovation lender. The short version (longer version here) is that it matches homeowners with RenoFi lending partners, but it also underwrites the risk of the renos, with loans based on a home’s future value (as opposed to the current value of the home with a traditional HELOC) which increases borrowing power by 11x on average.
The most compelling product companies in fintech solve two problems simultaneously: They identify a funding gap and create or move a product online to fill it, and then use tech to transform the margin structure to drive long-term defensibility. RenoFi’s vision fits this framework exactly, and the team’s progress over the past two years in making it a reality has been remarkable.
Despite 2021 being the first full year of operation, the RenoFi platform is now being leveraged by lenders operating in 49 of 50 states who collectively have generated over $10B in renovation loan demand. The company has more than a dozen lending partners onboard its platform and is also seeing a ton of inbound interest from some of the largest banks and credit unions in the country.
It’s easy to see why experts expect growth in the home renovation industry to continue indefinitely – an aging housing stock, inventory at historic lows, a global pandemic that created a mass exodus for the suburbs (and even HGTV’s rise in popularity), to name a few reasons.
They’re also among the reasons why we see a big future for RenoFi. It’s one where there’s an established category for renovation loans, but also one where RenoFi is the category leader.