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Less than a year after launching with a $5 million seed round, home-equity investor Splitero is starting off 2023 with more than double that amount, $11.7 million in Series A funding.
Splitero announced in a press release sent to Inman that Fiat Ventures led the investment round with additional participation from Gemini Ventures, Joint Effects, PBJ Capital, Permit Ventures, Dream Ventures, Goodwater Capital, Spark Growth Ventures and Oyster Fund.
“The completion of our funding round, in the current economic environment, is a testament to our team’s hard work and tremendous growth this year,” said Michael Gifford, co-founder and CEO of Splitero, in the announcement. “This funding supports our mission to transform how homeowners access their equity. We are grateful for the support of our investors.”
San Diego-based Splitero has secured more than $1 billion in total financing to back its model, which offers cash payments, or Home Equity Investments (HEI), to homeowners of up to $500,000 without income or credit score requirements and no monthly payments. The funds have a 30-year repayment period and can be paid off through a home sale, refinance or cash payoff.
As part of the funding, Splitero is adding Oregon and Utah to its service area after launching in California. It also works in Washington and Colorado.
The fast-growing fintech sector, or “finance technology,” is keen on bringing change to the real estate industry, much like its many siblings in proptech.
There’s little doubt that the traditional methods for accessing home equity, home equity loans and lines of credit, lack considerable respect for the human experience. In essence, the process for both is very similar and at times even more challenging than applying for an initial mortgage. When asked about the state of the mortgage and home equity consumer experience, Gifford agrees it’s broken.
“Helping homeowners is a core belief and the reason we started the company,” Gifford said. “Splitero’s mission is to provide homeowners better options to access home equity without new debt or additional monthly payments.”
Proptech entrepreneur William Schoeffler launched Hitch in 2022 to also revamp how people leverage the value of their homes. He said in a text message to Inman that far too many rely on credit cards and other high-interest vehicles when in need of personal capital.
“We realized that with home equity’s growth in the last few years, millions would benefit from a HELOC over other financial products,” he said. “According to the Mortgage Bankers Association, HELOCs from large banks take upwards of 66 days to process, whereas we can do it in about five days.”
Schoeffler pointed to a survey by digital lending platform MeridianLink that reported 1 in 5 homeowners are poised to use a HELOC in 2023, but that only half of homeowners are aware of what a HELOC offers.
Figure is another provider of fast-access HELOCs and home-equity products. It promises 5-day approval periods and a frictionless online application process. Figure was started in 2018, well before most in this space. There’s RocketMortgage, too, which now deems itself a “fintech” and rolled out TrueBill to help people with fast, easy HELOCs.
Citing a June 2022 Wall Street Journal report, Splitero told Inman there is $27.8 trillion in home equity, with nearly one in three of the 55.8 million mortgaged homes in the U.S. having more than 50 percent equity.
That volume aside, there is little debate that relying on bank-backed credit cards and other forms of personal lending is a common tactic for many Americans, largely because of the ease of access to them and how challenging it can be to access home equity.
“Homeowners’ financial needs are constantly evolving, creating a demand for unique and flexible solutions that support them in reaching their goals and achieving financial wellness,” said Alex Harris, general partner of Fiat Ventures, in the announcement.
