Knock Secures $220 Million in New Funding to Help Homebuyers and Their Agents Compete in Today's Competitive Housing Market

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Mar 15, 2022, 15:00 ET

The capital puts the pioneer of the Buy Before You Sell category on a path to profitability by year-end

NEW YORK, March 15, 2022 /PRNewswire/ -- Knock, the fintech company on a mission to make all homebuyers Power Buyers, today announced it has secured $220 million of new funding, including a first close on $70 million in equity and $150 million in new debt used to power its payments platform that helps customers finance their dream homes. The round was led by Foundry Group with participation from existing investors First American Financial and RRE Ventures as well as new investors, including the National Association of Realtors, director/producer M Night Shyamalan and Mauricio Umansky, Co-Founder of luxury real estate brokerage The Agency.

"This capital puts us on a solid foundation and on a path to profitability by year-end so we can continue on our mission of revolutionizing the home buying experience for everyone," said Knock Co-Founder and CEO Sean Black.

The funding announcement comes nearly a year after Knock announced it hired Goldman Sachs to explore opportunities to take the company public at a valuation of $2 billion. Knock turned to the private markets following a series of macroeconomic events that roiled financial markets that began with the SPAC market disintegrating and was followed by two COVID outbreaks, the implosion of Zillow Offers, a pullback of investors from the public markets due to inflationary fears and most recently Russia's invasion of Ukraine. Black chronicles the events that led to today's announcement in this detailed post on his personal blog.

This decision will include a reduction of Knock's workforce by approximately 46%. "While substantial, the capital we raised is much less than what we set out to raise in our IPO, requiring us to rightsize the business, including the difficult decision to part ways with a number of our beloved Knockstars. Today's announcement weighs heavily on us and me, in particular. These are people who worked tirelessly to make Knock the most simple, certain, convenient way of buying and selling a home. I am so incredibly proud of and grateful to each and every one of them," Black said.

In the last 12 months, the company achieved double- and triple-digit growth in transactions, revenue and gross profit and grew from 14 to 70 markets nationwide. Knock entered five additional markets in and around Seattle in early 2022, expanding the company's presence to 75 markets.

"We will continue to partner with the industry to make all homebuyers Power Buyers. Being able to compete with cash buyers is more important than ever, and Knock Home Swap™ and Knock GO™ (Guaranteed Offer) provide a certain, convenient and cost-effective way for agents to help their clients navigate today's housing market," Black said. "Our plan is to double-down on our existing 300 broker partners and 115,000 Knock Certified Agents and give them a limited time exclusivity. Those agents who offer Knock will have a competitive advantage."

"We watched Knock's leadership team turn its vision of revolutionizing the real estate transaction into reality by pioneering an entirely new and fast-growing category with the Knock Home Swap. Knock is now the category leader using technology, data and its expansive industry relationships to help more people realize their homeownership dreams in a way that is truly revolutionary and unique among its peers," said Seth Levine, Founding Partner of Foundry Group. "Foundry is proud to deepen its partnership with Knock as it transforms the way people in markets across the country buy and sell homes."

About Knock
Knock is rewriting the rules of homeownership by making all homebuyers Power Buyers. Knock's flagship Home Swap™ product empowers consumers with a non-contingent offer to buy the home they want before selling the home they have, providing certainty knowing you've found your dream home and the convenience of not having to live through repairs or showings. Knock GO™ (Guaranteed Offer) is a cash-like home loan solution for first-time homebuyers looking to compete in today's hot housing market.

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SOURCE Knock