Varanium NexGen Fund leads the investment round in Fintech company HomeCapital
CEO Insights team, Press Release
The company’s prime mission is to enable aspiring time home buyers accelerate their home ownership through its down payment assistance program. The program provides down payment assistance to home buyers up to half of their initial costs at zero interest cost. Home buyers pay back the zero-cost assistance over a period up to 1-2 years and thus helping them to build equity in the homes. Headquartered in Mumbai, the company supports home buyers in 8 cities including Mumbai, Bangalore, Chennai, Pune Kolkata amongst others. The proceeds of this round will be used to expand operations and scale technology infrastructure. Unitus Capital was the financial advisor to the transaction.
Housing Affordability and low savings for down payment are some of the biggest problems for first time home buyers in India. The problems have become more acute in large cities due to rapid urbanisation and relatively young work force population (median age of 29) with no savings. Down payment towards house has emerged as the biggest hurdle for young first-time home buyers pushing the decision to buy their dream house into future.
Sharing his investment thesis, Aparajit Bhandarkar, Partner, Varanium fund said “Home Capital’s product address an important challenge for the millennial home buyers and the real estate market. The team has a strong track record of execution both from a technology and business perspective at frugal costs.”
Home Capitals product address an important challenge for the millennial home buyers and the real estate market. The team has a strong track record of execution both from a technology and business perspective at frugal costs
Speaking on the investment, Founding team of HomeCapital commented, “With this capital commitment, we continue to build a strong business foundation in the housing sector to support aspiring homebuyers and remain focussed in bringing a positive impact in the lives of millions of people”
The company aims to help accelerate the $ 100 bn housing industry, poised to reach approximately $ 500 Bn by 2025. HomeCapital program has facilitated $125 Mn of housing sales till date through its flagship program.
The company is also in pilot stages of HomeNxt- an industry wide home loan co-lending platform. This platform will facilitate the flow of credit to affordable housing and share lending infrastructure among the housing finance companies.
Down payment assistance programs are available in countries like US, UK, Canada and approximately 15 other countries and are administered by Federal and state governments to promote housing. There are very few private companies globally addressing the challenge of housing affordability. This sector has seen significant traction with most notable transactions include a $ 30 mn fund raise by US based Divvy in a round led by Andresson Horowitz, $ 40 mn Series B by Unison and Landed, a Y combinator incubated company that completed a $ 7 mn round with participation by Zuckerberg Foundation.