Home equity financing platform Patch Home has secured $1m in Seed funding as it launches out of private beta mode in California.
The funding comes from VC firms Techstars Ventures and KIMA Ventures, as well as angel investors Eric Di Benedetto and Airbnb co-founder Nathan Blecharczyk, among others.
The San Francisco-based firm allows existing homeowners to cash out equity at 0% interest with no monthly payments.
In exchange for 0% interest, Patch Homes shares in future appreciation or depreciation of the home value.
The model is designed to allow customers to receive capital from investors to finance their home equity, without interest rates or monthly payments, in exchange for a fraction of future home value change.
It says both the homeowner and investor will see a profit when the home appreciates in value and Patch Homes will share in downside loss with homeowners if it decreases in value.
Company co-founder Sahil Gupta commented: “There’s a problem with the current home financing market, in that 67% of homeowner wealth is trapped in home equity.
“Most homeowners are asset-rich but cash-poor, and we want to help bridge that gap and solve their cash flow problems.
Our model offers home equity financing without any monthly payments, allowing homeowners to tap into their home equity and use their money the way they choose, whether to pay down debt, invest in their future, or make needed home improvements.”
Patch Homes says it will use the capital to expand its team and geographical footprint beyond California and into new states before the end of the year.
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