CEO Of Knock Talks About Crowdfunding Campaign

By KIMBERLEY HAAS

The CEO of a real estate technology company that helps homeowners buy a new house before they sell theirs says an equity crowdfunding campaign they launched last month has been well received.

Sean Black, who co-founded Knock with Jamie Glenn and Karan Sakhuja in 2015, said during a recent interview with The Mortgage Note that the timing seems to be right for this venture.

Black and Glenn were on the founding team at Trulia, which went public on the NYSE and was acquired by Zillow in 2014 as part of a $3.5 billion stock-for-stock transaction. Back then, individuals couldn’t invest in these companies until they went public.

“Crowdfunding regulation has matured quite a bit in the last couple of years,” Black said. “When we went public at Trulia, it wasn’t even a consideration that nonaccredited investors could have participated in any of the rounds leading up to the IPO.”

The current crowdfunding campaign uses the public platform Wefunder and is being co-led by Second Century Ventures, the venture capital arm of the National Association of Realtors, and Foundry Venture Capital, according to a press release.

When asked about what this means for the company, Black said they are working with the top 10 lenders in the industry and their goal is to remain independent.

Black said they are currently integrating technology with lender partners so when a homeowner submits an application they can be approved for a loan on a new home and an advance loan from Knock.

Homeowners can use this advance loan for a down payment on the new home, to cover the cost of repairs on the home they are selling, and for moving expenses.

“The more ingrained we are with the way our lenders and agents work, the easier it is for consumers to know upfront what their options are. So we’re very focused on the technology and the consumer experience,” Black said.

Knock is available in 18 states and the District of Columbia. Black said they do best in secondary markets where people want to sell their first or second home but stay in the area.

“The homes are typically $500,000 to $600,000 that people are buying and they’re selling maybe their first or second home that’s $400,000 or $500,000. They’re mostly moving up,” Black said.

Although the last two years of high interest rates and a lack of housing inventory have put pressure on the entire real estate industry, leaders at Knock have used the time to improve their business model and Black said they will “Survive Until ’25.”

“I’ve just seen this cycle before where you’ve just got to get through to the other side of it, and there’s plenty of opportunity once you do to make an impact,” Black explained.

Since being founded, Knock has raised $136 million in equity financing from top-tier investors, including Second Century Ventures, Foundry Venture Capital, RRE Ventures, First American Financial (aka Parker89), Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs.