The article discusses FirstMark's excitement about leading the Series A investment in Backflip, a proptech startup that is transforming the "fix and flip" real estate market. Backflip has reached top-decile growth and a $10 million net revenue run rate, with over 18,000 loyal members. The company aims to become the operating system for managing the $190 billion "fix and flip" transaction volume in the US, as well as a marketplace for all the transactions surrounding this process.
The author acknowledges that he was initially skeptical about the "fix and flip" industry, but realized that Backflip is providing a necessary service in transforming the aging housing stock of the US into desirable homes that the next generation of home buyers can afford. The article highlights the significant underinvestment in housing in the US, with over 50% of houses being over 40 years old, a 3 million unit housing shortage, and median home values outpacing median household income by ~2x over the past twenty years.
Backflip primarily monetizes through its loan origination, which has had zero losses of principal to date. The company's approach and underwriting processes are designed to achieve investment-grade credit ratings, which should help drive institutional capital markets to support these entrepreneurs. Backflip has enabled its members to realize an average gross profit of $82,000 per property on the platform and has driven members to come back for Backflip projects multiple times per year.
The article emphasizes the combination of product craftsmanship, customer empathy, community, and capital markets prowess that Backflip's founders, Josh and Jake, bring to the table. FirstMark is excited to join them on their journey to build a truly generational company and community in the world's most enduring asset class.
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by at firstmark.medium.com 04-29-2024
https://firstmark.medium.com/head-over-heels-for-backflip-our-latest-series-a-investment-2246963bbe70Deeper Inquiries