Home equity alternative Point raises $122M in new funding
Point, which provides an alternative to traditional home equity lending products, has raised $122 million in new capital from eight investors to expand its reach.
There was a $100 million platform capital commitment from Kingsbridge Wealth Management, bringing Point's current total to $265 million. Atalaya Capital Management made a $150 million platform capital investment in April 2018.
The company also raised $22 million in a Series B round of equity funding, led by Prudential Financial and DAG Ventures.
Kingsbridge also participated in the equity round, along with Financial Venture Studio and Enterprise Community Partners and existing Point investors Andreessen Horowitz, Ribbit Capital and Bloomberg Beta.
Nearly two-thirds of homeowners that took a home equity line of credit in the past two years looked at alternatives, a recent J.D. Power survey found. They were concerned about interest rate increases, getting overextended with debt and the higher payment required after the draw period ended.
Rather than making a loan to the homeowner, Point takes a position in the property's future appreciation. The funding does have a time limit, although the borrower can repay Point prior to the end of the term.
"Point is seeing significant demand for its home equity investment solution," said Point CEO Eddie Lim in a press release. "We are witnessing the emergence of a whole new class of financial solution that is aligned with homeowners, and investors are taking notice. 2019 is proving to be a year of exponential growth for the company, and we expect that growth to continue as home equity investments open up critical liquidity for a lot more homeowners."
Point expects to fund over 1,000 transactions this year. The company, currently operating in 13 states and the District of Columbia, wants to expand to 30 states by 2020.