Hometap raises $100M to continue growth and invest in residential real estate

Homeownership investment startup based out of Boston, Hometap, has raised $100 million in a new funding round led by ICONIQ Capital and current investors General Catalyst, G20, Pillar and American Family Ventures.

Hometap is led by Co-Founder Jeffry Glass, the former Managing Director at Bain Capital and Co-Founder of esports company, NRG eSports. The startup lends homeowners cash in exchange for an agreed-upon percentage of the future value of their home.

It takes a minority stake anywhere between 5 percent to 20 percent in a property’s current value paying the homeowner anywhere between $40,000 – $150,000 for a 10-year term. When the home sells or the homeowner settles the investment, Hometap is paid out a percentage of the sale price or current appraised value. At the end of the term, the homeowner either sells the property and Hometap takes a cut of the sale price or the homeowner purchases Hometap’s stake.

Hometap holds a second lien on the property, which means that the company gets paid after the primary mortgage is settled.

Hometap is part of a growing cadre of up and coming real estate startups. While these companies are seeing considerable traction, some healthy skepticism is to be maintained.

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