The hybrid and work-from-home trend is driving the housing market to frenzied levels. Homes are selling at record speed; the median number of days a home sits on the market is down to 3 in some popular markets. With such competition, buyers need to ensure they are presenting the most competitive and clean offers in order to ensure they are able to purchase their desired properties. Ribbon is a homeownership facilitation platform that lets existing homeowners submit all-cash offers for new properties. Ribbon’s clients, introduced through agents and lending partners, are able to avoid contingencies that can delay and derail deals in this market and sellers are guaranteed prompt payment without drawn-out closings. Founded in 2017, the startup currently operates in six states with plans to expand its footprint to include more markets and more product offerings.
AlleyWatch caught up with Ribbon CEO and Cofounder Shaival Shah to learn more about the company, the state of the red-hot housing market, strategic plans, latest round of funding, and much, much more.
Who were your investors and how much did you raise?
We raised $150M in Series C equity and working capital. The round was led by Greenspring Associates, with participation from existing investors Greylock, Bain Capital Ventures, NFX, Nyca, Thomvest, and Jake Seid. We also welcomed new strategic investors, including First American Financial, Waterfall Asset Management, TriplePoint Capital, Spencer Rascoff’s 75 & Sunny Ventures, Gary Beasley, Gregor Watson, and Guy Gal.
Tell us about the product or service that Ribbon offers.
Ribbon is the leading real estate software to create a more level playing field for everyday homebuyers, sellers, and agents. We operate as a homeownership company, enabling everyday buyers to upgrade their offer to a non-contingent, all-cash offer, ensuring a guaranteed close to provide the strongest offer in real estate. And for sellers, Ribbon provides the speed and certainty of cash.
What inspired the start of Ribbon?
Growing up in an immigrant home, I witnessed my parents fight for the opportunity to own a home – working ten times harder to achieve access, only to have it snatched away. While my parents eventually won their home, this experience is what fuels me to reshape access to homeownership – top to bottom – with Ribbon.
With equality in homeownership, we can open up access to education, healthcare, and employment. Housing is a foundational fabric of society and one that can empower millions of families everywhere.
How is Ribbon different?
Unlike other home buying platforms, we work with the real estate ecosystem of agents, brokers, and lenders. Other companies in the space compete with agents or lenders to take commission and subsidize their costs. However, real estate agents and lenders are experts, advocates, and community builders. They are our partners and allies. 100% of our volume is with partners.
If the consumer loses, agents and lenders lose. With Ribbon, we are an open architecture that allows everyone involved to participate in building a new home transaction experience together.
We’re leveling up the consumer experience with open platforms so that all transactions are fair and equal. This creates the first-ever market network for homes and a resilient way to simplify the home buying and selling process, while at the same time creating a powerful financial product that inserts certainty and provides peace of mind for everyday buyers.
What market does Ribbon target and how big is it?
We currently operate in six markets – Georgia, North Carolina, South Carolina, Tennessee, Texas, and Florida. Each market was carefully chosen based on the competitive housing landscape and where the most impact to potential homebuyers can be made.
What’s your business model?
Our business model is highly aligned with our homebuyers; we only get paid when they win and close. Our motto and mission of achievable homeownership is not a bumper sticker – everyday buyers winning the home they love is paramount.
Our software for agents and homebuyers to make offers on homes is completely free to use. For RibbonCash, our premium financial product, we charge a small transaction fee that varies based on the state that a home buyer is in.
Unlike models that maximize profit by buying low and selling high to consumers, our model takes a consistent transaction fee, only when homebuyers win that dream home.
How has COVID-19 impacted the business??
The housing market has shifted dramatically over the past year as a response to the global pandemic. Demand has skyrocketed, which means so have prices. What we are seeing drive a lot of price increase is the record low inventory – national inventory is down 30%. All that to say, the market is hot and competition is high, often with 30-40 offers on a single home.
What was the funding process like?
We started the process by really thinking through whom we want to partner with the most. We have an incredible investor group and board of directors, and we relied on them to advise us as to who were the best long-term partners for our business. From there, we wanted to ensure we put together a fundraising deck and the supporting data to provide as transparent and informative a picture of the company as possible. Again, we’re optimizing for the right long-term partners, which is critical based on the ambition of what we’re building. Seyonne Kang from Greenspring came highly recommended by Pete Flint from NFX/Trulia and we’re thrilled to have her lead our round, along with some incredible strategic investors and individuals.
We started the process by really thinking through whom we want to partner with the most. We have an incredible investor group and board of directors, and we relied on them to advise us as to who were the best long-term partners for our business. From there, we wanted to ensure we put together a fundraising deck and the supporting data to provide as transparent and informative a picture of the company as possible. Again, we’re optimizing for the right long-term partners, which is critical based on the ambition of what we’re building. Seyonne Kang from Greenspring came highly recommended by Pete Flint from NFX/Trulia and we’re thrilled to have her lead our round, along with some incredible strategic investors and individuals.
What are the biggest challenges that you faced while raising capital?
Proptech is a hot space, and to find the right long-term partners who are aligned with our mission and vision, we put in a lot of effort into sharing our strategy and vision and how it’s unique. Our growth numbers certainly attracted a lot of attention, but aligning with the vision was the key part of our process. This certainly takes a lot of time and effort on both Ribbon and the investors’ part, but we believe it’s easily worth it, given how long term this partnership is — and the ambition of what we’re trying to build.
What factors about your business led your investors to write the check?
As a starting point, our 15x growth this year speaks for itself and proves incredible demand for our product, even before we’ve aggressively expanded to new states. On top of that, investors believe in our unique strategy to empower the real estate ecosystem of agents and lenders in our collective effort to help everyday home buyers and sellers. Our investors are aligned and believe in our long-term vision, and they understand the massive scale of what we’re trying to create. They want to be a part of transforming the home transaction.
What are the milestones you plan to achieve in the next six months?
In the next six months, we’re launching new financial products that will bring certainty and create a more level playing field for homebuyers and sellers, we’re launching and expanding our software to connect buyers, agents, lenders, sellers seamlessly in the home transaction, and we’re expanding to more states and markets to enable more families to achieve homeownership.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Different businesses require very different amounts and types of capital. For those that are looking to fund aggressive growth, it’s never been a better time to be a New York-based startup. The last year has shown that New York can create all types of high-growth, massive companies, from infrastructure, to being the fintech and real estate tech capital of the world.
Different businesses require very different amounts and types of capital. For those that are looking to fund aggressive growth, it’s never been a better time to be a New York-based startup. The last year has shown that New York can create all types of high-growth, massive companies, from infrastructure, to being the fintech and real estate tech capital of the world.
Where do you see the company going now over the near term?
With the equity and working capital, we can design, build, and launch more offerings, and hire and scale our team to deliver an end-to-end home transaction that brings certainty and simplicity. We also upsized our credit facility – this will help us meet our fundamental goal, allowing us to work with more everyday buyers, in more places, to secure their dream home. The funding fuels expansion and we plan to be in half the US by 2023.
What’s your favorite outdoor dining restaurant in NYC?
Honestly, halal carts are my favorite outdoor dining experience in NYC.
