Canadian real estate technology innovator Properly has secured an investment of $100 million to boost plans to grow the company in Canada. The Toronto-based company secured the credit facility from two leading U.S. finance firms – Silicon Valley Bank and i80 Group.
“It’s no secret that Canada’s real estate industry is ripe for innovation,” says Anshul Ruparell, co-founder and CEO of Properly. “This partnership will help us realize our vision of making home buying and selling data-driven, predictable and stress-free. Now Properly can help even more Canadians buy their dream home as soon as it hits the market, even if they haven’t sold their current one.”
Properly was launched in 2018. Ruparell says the company is bringing a new realty service to Canada, transforming the home buying and selling experience with AI-powered home valuations. The firm is headquartered in Toronto with offices in Ottawa and Calgary and plans to expand across Canada.
“In Canadian real estate most of the technological progress has been around how do people find homes,” says Ruparell. “When it comes to the transaction itself, all we’ve seen lately are discount players.”
He says Properly lets homeowners secure the financing needed to purchase their next home so they can act quickly when they find a home they love. Once they’ve moved into their new home, Properly lists their old home on the market, so they can avoid living through showings and open houses, which is especially important during the pandemic. Customers can choose to work with one of Properly’s in-house real estate agents to help them navigate the purchase and sale process.
Properly’s service costs the same as working with a traditional real estate agent; however, it comes with added financial benefits such as avoiding paying for two mortgages or incurring bridge loan costs, says Ruparell.
“We will work with our customers and in almost all cases they’ll sell their home on the market but in the rare instances where they don’t we can make sure that we have the capital available to actually purchase their home from them . . . This funding effectively puts us in a position where we can actually purchase homes from customers should their homes not sell and put it on the market.”
Silicon Valley Bank, which focusses on serving technology and life science companies and their investors, and i80 Group, a specialty finance firm that supports breakthrough fintech and proptech, are working with Properly.
“This is a significant investment,” said Ruparell of the $100-million financing. “I think it speaks highly to really two things. One is just the level of demand we’ve seen for this service since launching it has been really exciting and we needed this amount of capital to actually put us in a position to satisfy that demand and capture the customers that want to work with us.
“Beyond that, it’s also a testament to the fact there is a lot of opportunity to drive forward innovation within Canadian real estate. This partnership with these major financial institutions is a really nice testament to that fact,” says Ruparell.
“We’ve seen technology-based real estate companies gain enormous market share in the U.S. by making the experience of buying and selling homes less stressful and more convenient,” says Nick Christian, head of specialty finance at Silicon Valley Bank, in a statement. “We see the same extraordinary opportunity in Canada, and we’re proud to support Properly as it works to revolutionize the real estate transaction.”
“It was clear while getting to know the Properly team, the people and process would result in an unprecedented offering in the Canadian residential real estate market,” says Marc Helwani, founder of i80 Group, in a statement. “While we work with many innovative companies in the U.S., this is our first partnership with a Canadian firm. Properly’s results speak for themselves, and we’re excited to be a part of their success.”
Properly calculates a home’s estimated selling price using its AI computer model based on 200,000+ actual sold homes, nearby comparables and detailed market analyses. A seller can take Properly’s guaranteed backup offer to any bank or financial institution to secure unconditional financing for their next home.
After people have purchased a new home and moved out, Properly helps the client make their existing home attractive to sell and it will pay the current home’s mortgage while it is listed. If the home doesn’t sell, Properly will buy it directly from the client at the guaranteed backup offer price.
Upon the sale of the home, Properly will use the funds received to pay off the existing mortgage and Properly’s five-per-cent commission.
“Our intention and ambition is to be in every Canadian city over the next couple of years,” says Ruparell. “But this year we’ll be focused on our existing markets.”