Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Measure Better Investing in Racial Equity Beyond Aid Beyond Trade-offs Impact en las Americas New Revivalists Women Rising in India Operation Impact
Smarter Money Women Rising 2030 Finance Locavesting Inclusive Economy Regeneration Impact Tech New Power Geographies
Slack Conference Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Industry News Impact Management Good Business Personal Finance Faith and investing Billionaires
Gender Lens Investing Women Rising in India
SDGs Climate Finance Clean Energy Innovative Finance Full Stack Capital Long-termism
Opportunity Zones Investing in place
Entrepreneurship Return on Inclusion Good Jobs Inclusive Fintech Creative economy Housing New Schooled Well Being People on the Move
Conservation Finance Farmer Finance Financing Fish
Blockchain/AI/IoT Urban Tech Food Tech Inclusive Fintech
Human Rights Democracy and Peace News and Information
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States Growth Markets
Subscribe
Features
Series
Themes
Community
Data
Subscribe Log In
More

Patch Homes raises $5 million for debt-free home refinancing



ImpactAlpha, September 19 – Ten years in finance exposed Sahil Gupta to average Americans’ financial woes. “Everyone wants to invest for retirement and have a nest egg, but the average person is struggling to make their mortgage payments and pay down debt,” Gupta told ImpactAlpha.

Gupta launched Patch Homes to help people access cash when they need it by tapping into their home equity. But instead of offering home equity lines of credit or second mortgages, Patch offers a debt-free option: it takes an equity stake in customers’ homes.

The company has raised a $5 million equity round from Union Square Ventures, Tribe Capital Techstars Ventures, Breega Capital, and Greg Schroy.

Gupta built Patch’s model around the structure his father used to buy their family home in India in 1982. “My father believes in taking on no debt. He has never taken out a loan in his life. So when he was building our family home in Delhi, he asked my uncle to co-invest in our house,” he explained. Thirty years later, that home is still in the family.

Patch also sees itself as a long-term partner that supports homeowners as they weather cashflow needs and life changes. Its equity model is limited to 10 years, however, with a maximum deal size of $250,000.

Patch recoups its investment (plus its cut of the home value appreciation) either through a payout or when the home is sold. If a home depreciates, Patch takes a loss.

Since launching in 2016, the company has expanded into 11 metro areas and underwritten homes worth $3.5 billion in total. It is capitalized by real estate private equity firm Patch Capital Partners (no relation).

You might also like...