UpEquity: Promoting Happier Home Buying

Navy Veteran Tim Herman experienced this frustration firsthand when he was denied his offer for a new home because the seller didn’t want to deal with the longer signing time associated with a VA loan. This sparked the launch of Alumni Ventures portfolio company UpEquity — a startup helping homebuyers close fast — regardless of whether it is a VA or conventional home mortgage. The company’s tech-enabled platform offers a combination of free cash offers, automated underwriting, and low mortgage rates, enabling homebuyers to expedite the closing process.

Watch this video featuring CEO Tim Herman to learn more about the inspiration behind UpEquity:

Addressing the All-Cash Offer

While all-cash offers dramatically improve the likelihood of closing on a house, only roughly 30% of Americans can afford this type of payment. UpEquity makes this possible for more potential homebuyers by automatically underwriting mortgages and turning any offer into an all-cash bid. The company can close mortgages as soon as ~14 days because of its tech-first approach that uses computer vision to automate the underwriting process. 

How does UpEquity profit?

Unlike competitors, UpEquity does not charge customers for the cash offer. Instead, the company makes money originating the mortgage — earning a 2% gain-on-sale paid by mortgage servicers. UpEquity products are sold via two primary channels: direct-to-consumer and realtors. 

What We Liked About UpEquity

Substantial Market Opportunity: UpEquity is disrupting the highly fragmented ~$4 trillion annual U.S. mortgage origination market —where no mortgage originator has more than 8% market share and most are under 1%.

Strong Revenue & User Traction: UpEquity has shown it’s capable of establishing product-market fit with clear and convincing evidence of demonstrated demand, positive and compelling unit economics, and the ability to scale and develop the business model in other markets. The company boasts a 6x revenue growth year over year and has an 88 net promoter score and 4.9/5 star rating on Google. 

Well-Established Backers: UpEquity’s lead inventors include established Texas-based firms S3 Ventures and Next Coast. S3 has raised $600 million in AUM and recently announced one of its largest exits of construction management startup Levelset. Next Coast is a $250 million AUM fund and has made several fintech investments. Both investors have high conviction in the opportunity and team and are working closely with the company. 

Alumni Ventures was able to secure an investment in UpEquity thanks to the network of Larry Warnock, Managing Partner for Ring Ventures (for the Texas A&M community). Warnock has sat on boards with members of the investment teams at S3 and Next Coast.

How We Are Involved

Ring Ventures, Congress Avenue Ventures (for the UTexas community), and Lakeshore Ventures (for the UChicago community) participated in UpEquity’s $50 million Series B led by S3. Part of AV’s allocation was also raised via Syndication.