REX Homes, the online residential marketplace with salaried agents and two percent commission rates, has announced a $25 million investment from Lion Capital as the company continues to expand despite the coronavirus.
Lion Capital, which has backed companies including Jimmy Choo Ltd, All Saints and Round Table Pizza, is betting the REX brand has the key to growth in a sector plagued by innovation hiccups and a pandemic that has crippled the traditional home-buying process
“We believe the REX brand and service offerings are scalable to serve an expanded audience,” said Matthew Nordby, partner at Lion Capital. “REX Homes was made for this exact moment where families need safe and secure options and demand greater value when selling their asset or buying their next home.”
With COVID-19 reshaping how Americans buy and sell real estate, REX Homes has been able to capitalize on demand for safety, convenience, and value.
Year-to-date, through April, REX has tripled its business and saw one quarter of all transactions completed by a buyer who only toured the home virtually.
In early 2020, virtual tours at REX grew a thousand percent between January and March as consumers looked for safe options to shop for homes during the COVID-19 pandemic and shelter in place rules.
Once a buyer has found the home they would like to purchase, REX Homes’ automated back office handles the entire transaction, including mortgage, escrow and insurance, without requiring any in-person meetings. Agents work on salary, not commission, and the company’s fee covers both sides of the deal, saving sellers an estimated $20,000 on average, the company claims.
Lynley Sides, co-founder at REX Homes, said “We built REX knowing consumers wanted a safe, convenient, more affordable real estate transaction. We are excited, and ready, to bring our value to new and wider audiences with Lion Capital as a partner.”
The investment from Lion Capital comes on the heels of a year of growth for REX Homes. In 2019, REX listings grew approximately 160 percent with revenue growing 180 percent in 2019 over 2018.
The investment from Lion Capital comes on the heels of a year of growth for REX Homes. In 2019, REX listings grew approximately 160 percent with revenue growing 180 percent in 2019 over 2018. In now employs 220 full time staff, 10 part-timers and 245 gig workers.
REX is in hiring mode, too. The company said it is focused on growing within targeted markets this year and has already hired a team of summer interns to work on software engineering, data science and analytics, economics, business operations, strategy and growth, product management, finance, and human resources.
In New York, where the company launched in 2017, REX has doubled its full-time agent roster in since 2018 and continues to hire associate agents right now, especially in New Jersey.
Scott McNealy, co-founder of Sun Microsystems, investor, and REX board member, said, “REX Homes has assembled a winning team focused on breaking down traditional barriers in real estate and giving consumers greater control and value over their buying and selling experience. With Lion Capital onboard, I am excited to see how REX Homes scales their offering to serve a broader base of consumers and achieve greater heights as a company.”
As of April 2020, REX is operating in seventeen states nationwide, including New York and New Jersey. London-based Lion Capital’s new investment brings the startup’s total raised since its inception in late 2015 to $140 million.
The company also works with World Housing to fund the construction of a new home for every 50 homes sold on the REX platform.
Its growth comes as rivals including Redfin, Realogy and Compass, have been forced to take tough measures to shore up during the pandemic, including furloughing workers and cutting executive pay.