April 22, 2020
By Benjamin Horney
Law360 (April 22, 2020, 12:26 PM EDT) — Noah, a California-based financial technology startup that provides home financing services, said Wednesday that it has amassed an additional $150 million in funding to finance equity-sharing contracts for homeowners.
The fresh funding, which comes from institutional investors including pension funds, will be put toward Noah’s program to finance equity-sharing contracts for homeowners through what it says is a simple technology platform, according to the announcement. Formed in 2016 as Patch Homes Inc., the company rebranded last month and now goes by the name Noah, according to a March statement. The startup is backed by the likes of Union Square Ventures, Breega Capital and Techstars Ventures.
“Amid this state of financial uncertainty, we’re encouraged by our latest capital investment as it strengthens our ability to continue to partner with homeowners and help them access immediate funds,” Noah Founder Sahil Gupta said in a statement Wednesday.
“Unlike traditional financial institutions, Noah is able to gain a full financial profile of our homeowner partners and provide them with funding — even if they may be facing unemployment or a reduced income,” Gupta added. “We’ve had homeowners come to us when they had nowhere else to turn and it’s important that we continue to develop long-term partnerships, even in times of economic uncertainty.”
Through the Noah platform, homeowners have to supply three pieces of information in order to get prequalified for financing — the address of their property, the debt balance on the home, and the homeowner’s credit score. Then they can submit an application using Noah’s customer portal, and if they qualify, the company can distribute funds in as little as 15 days, the announcement said.
The company notes on its website that the financing Noah provides is not a mortgage or a home loan but instead a debt-free investment agreement that allows homeowners to access their home equity through an equity share model. In lieu of monthly payments or interest, users pay Noah a one-time lump sum at any point when they are able to, and the company says it makes money if the value of a given home increases during the length of the financing contract.
“We see our homeowner partners as more than just a credit score — our model leverages 80 billion data points across more than 60 different variables in order to obtain a holistic understanding of each investment,” Rahul Parulekar, chief investment officer for Noah, said in a statement. “This approach is a game-changer for investors, as it provides access to a historically stable asset class and a long-term growth opportunity for them to invest in equity instead of debt.”
Additionally, Noah said Wednesday that it is “actively hiring” and focused on scaling its already-existing product offerings. The Noah platform is currently available in select neighborhoods within California, Washington, Oregon, Utah and Colorado, and the company is planning to become available on the East Coast of the U.S. during the second quarter of 2020.
Noah was advised by Croke Fairchild Morgan & Beres.
–Editing by Daniel King.
About Croke Fairchild Morgan & Beres
Croke Fairchild Morgan & Beres is a corporate law firm providing services to businesses, private equity and venture firms and their portfolio companies, public companies, founders and family offices. Formed by partners who worked at preeminent international law firms, the firm boasts a deep bench of sophisticated and experienced corporate lawyers. With offices in Chicago, Lake Forest, and Milwaukee, our team provides exceptional legal service while affording our clients the benefits of working with a small, agile, and driven law firm. For more information, please visit us online at crokefairchild.com