As the established iBuyers of the world have continued to amass headlines and media attention for the past several years, immensely more agile ‘start-up’ competitors have quietly made significant moves, of which cannot go unnoticed. The small yet mighty Orchard recently raised a $69 million Series C to expand the growth of their platform, as Orchard looks to be a refreshing face among the highly competitive iBuyer industry.
Orchard launched in 2017 with similar features to traditional iBuyers with a grave distinction. The traditional iBuying model encompasses the utilization of high-speed technology to create a portal in which home buyers have a digital ‘Google-maps-like’ view into neighborhoods that illustrate real-time prices of listed homes for sale, all the while creating an environment where home sellers can sell directly to the iBuyers conveniently bypassing the stress of selling your home traditionally through agents and the MLS.
Orchard’s business model surely contains many of the same features of iBuyers, Orchard on the other hand is quite unique. Orchard instead focuses heavily on “dual trackers” clientele, which are the home buyers who are also in the process of selling their existing home. Orchard makes an offer on sellers’ home with a price that is guaranteed for 90 days. Like traditional brokerage, Orchard lists sellers’ homes on the market and if the home doesn’t sell within 90 days, then Orchard will purchase it at the listed price. All the while, Orchard additionally assists home sellers in purchasing a new home as their previous home is looking for a new owner. In essence, Orchard operates as a hybrid of residential brokerage shop and an iBuyer.
In early September 2020, Orchard announced the closing of a $69 million Series C lead by Revolution Growth, garnering the start-up with a resounding $138 million raised since its inception in 2017. As we have seen the entire world flip upside down resulting from the illusive coronavirus, real estate firms have been racing to respond to the pandemic in the form of enhancing technology. In March, Redfin said requests for video-based and 3-D tours had increased 494% in just one week. Surely, things have normalized since the ravages of the coronavirus in mid-March, these statistics nonetheless may be a window into where consumers will evidently want to begin their home purchasing/selling process. Orchard plans to utilize the Series C investment to further expand further their product and portfolio into markets like New York, Texas, Colorado and Georgia, states in which iBuyers already operate in.
While we have noted immense investment in real estate technology through the pandemic (i.e. Opendoor’s IPO), Orchard’s unique model may create a moat that allows them to build a reputable name with consumers. Recently stated, Orchard’s CEO Court Cummingham proved a very intriguing differentiator of Orchard stating “our model helps us create an accurate view of our customer’s current home, such that we can enable the customer to unlock equity from that home to use towards their next one.” With this forward-looking approach to creating a differentiating niche where the consumer is always first in this modernized buying and selling experience, Orchard’s outlook seems just right for introducing a refreshing platform that their dedicated ‘dual track’ customers will be immensely loyal towards amid all the noise from the competitive, and rather indistinguishable iBuyer players.