Rook Raises $4.1 Million in equity along with access to a Credit Facility, Affirming the Role of the Sharing Economy in Home Purchase Financing and Affordability
Boulder, CO Sept 18, 2022- PropTech innovator Rook announced a $4.1 million capital raise and access to a warehouse credit facility as it looks to grow its “Shared Value Investment” program, helping prospective homebuyers purchase the right home in return for a portion of the equity upside. In an environment of high house prices and rising interest rates, Rook offers homebuyers the ability to get into the right house, while sharing risk and reward with community-focused investors. A diverse set of investors provided the capital including LL Funds, First Mile Ventures, Kickstart Fund, Service Provider Capital, and Tango Ventures. LL Funds participated in the equity and is also providing the warehouse credit facility.
The last decade has seen sharp increases in house prices. Even with the recent slowdown, prices are near historical highs; in some desirable metros, prices are upwards of 10 times the “median income,” rendering homeownership an impossibility. Seventy percent of Millennials when polled suggest that homeownership is just a dream. At the same time, rents are increasing across the country at upwards of 50% in some areas, delivering a one-two punch for prospective home-buyers.
“There is a large portion of the population that is entering their prime home ownership years and are facing the daunting reality of buying a home with high-prices and rising interest rates; still, they desire homeownership, the ability to establish community and don’t want to be perma-renters,” said Ed Messman, Rook Co-Founder and CEO.
According to Jim Morrissey, partner at LL Funds, “Rook offers an exciting, new financing construct for prospective homeowners to buy houses in a shared equity model. Bringing investors and homebuyers into a symbiotic partnership with shared risk and reward and full life-cycle alignment is the quantum leap we wanted to support.”
Rook’s platform thoughtfully integrates web3 features that seek to engage a new demographic in helping to solve home affordability. Rook Co-founder and CTO Kevin Cawley said, “We are leveraging the opportunities of Decentralized Finance and applying them to the world’s largest asset class – housing.”
Serene Papenfuss, Principal at Kickstart Fund says, “We’re incredibly excited to partner with Rook because of its clear value proposition to all market participants: it brings diversification to home owners and investors, increases home ownership affordability, and plays to the DeFi ethos. In a time of soaring house prices and what we believe are sharing economy tailwinds, Rook is needed more than ever.”
Aaron Stachel, partner at First Mile Ventures added, “Home affordability is one of those problems that hits you in the face every day while reading headlines, and it’s only getting worse as mortgage rates rise. The Rook team has developed an elegant solution to get the next generation of homebuyers into homes they can afford while providing a way for investors to access residential real estate without becoming a landlord.”
Rook will use the proceeds to continue building out its partnerships, expand into new and compelling geographies, and to build an ecosystem of community-focused investors who match the needs of homebuyers.
Rook is an innovative PropTech company focused on widening home ownership and solving home affordability. Rook’s Shared Value Investment brings homebuyers, investors, and the housing ecosystem into partnership with full life-cycle alignment.
FirstMile Ventures is a seed-stage venture capital firm who commits early in a company’s life and helps them set the pace for future success. Kickstart Fund is a venture capital fund for early-stage startups in Utah, Colorado, and the Mountain West and we back the most visionary entrepreneurs with capital, community, and expertise for the journey. LL Funds is focused on investing in specialty consumer finance companies who rely on the Asset Backed Securities marketplace for growth and success. Their private equity funds provide growth equity to specialty finance companies; their lending funds provide warehouse lines to such companies; and their public market funds invest in ABS securities of all types.