RealtyHive

Growth Stage

A global Real Estate Platform featuring Time-Limited Events & buyers Cashback

Analytics

Raised to Date: Raised: $640,500

Aggregate Commitments $

Platform

Wefunder

Start Date

05/11/2021

Close Date

10/31/2021

Min. Goal

$150,000

Max. Goal

$3,000,000

Min. Investment

$500

Security Type

Equity - Common

Funding Type

RegCF

Series

Seed

Pre-Money Valuation

$12,500,000

Rolling Commitments $

Status
Funded
Reporting Date

10/31/2021

Days Remaining
Funded
% of Min. Goal

427%

% of Max. Goal

21%

Likelihood of Max
Funded
Avg. Daily Raise

$3,702

Momentum
Funded
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Location

Green Bay, Wisconsin

Industry

Real Estate & Construction

Tech Sector

Proptech

Distribution Model

B2B

Margin

Medium

Capital Intensity

Low

Business Type

Growth

RealtyHive, with a pre-money valuation of $12.5 million, is raising crowdfunding on Wefunder. The company has developed a platform to connect real estate buyers and sellers efficiently. The platform assists the buyers and sellers in property marketing, client branding and awareness, and cash backs for buyers and sellers through Cashifyd. Wade T Micoley and Mark Herman founded RealtyHive in April 2019. The current crowdfunding campaign has a minimum goal of $600,000 and a maximum goal of $3,000,000, and the funds will be used for enhanced development of the Cashifyd app, marketing, development, and staff expansion. RealtyHive has generated $1.7 million in revenue in 2020 with an 85% adoption rate by consumers.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$1,161,364

$0

COGS

$471,010

$0

Tax

$0

$0

 

 

Net Income

$-692,054

$0

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$123,705

$0

Accounts Receivable

$1,196

$0

Total Assets

$140,811

$0

Short-Term Debt

$7,865

$0

Long-Term Debt

$748,368

$0

Total Liabilities

$756,233

$0

Financials as of: 05/11/2021
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Ratings

Analyst Report

Synopsis

The real estate market has been extremely competitive over the last several months. Homes are selling in an average of just 20 days, and nearly half of those who sold homes in April 2021 accepted an offer within a week. This market reflects a confluence of unusual factors, including a COVID-induced price hike on building supplies, consumers’ desire to get more space post-pandemic, and the influx of millennials scaling up to a family home. Many analysts fear a housing bubble, the aftermath of which could cause a return to more unstable market conditions for real estate buyers and sellers. 

However, even in a more normal market, both buyers and sellers still face challenges. They struggle to find trustworthy real estate agents, having to sort through hundreds of options in their area. Sellers have little insight into the process of advertising a home for sale and can be frustrated by their agent’s inaction. Buyers can struggle to find the home they actually want and are often surprised by thousands of dollars in closing costs before they move in. And it’s not much easier for real estate agents. It’s relatively easy to become an agent but difficult to enjoy true success, as it’s an extremely competitive profession. In fact, as of January 2021, there were more real estate agents than listings in the US housing market. 

All in all, there are clear opportunities to improve the real estate buying and selling experience both for consumers and for real estate agents. That’s just what RealtyHive aims to do. The company offers several solutions addressing various pain points of the real estate system: a property marketing platform to get more interested eyes on properties for sale, marketing services to help agents stand out and generate leads, and a cash back program for buyers and sellers. 

RealtyHive’s current WeFunder raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

RealtyHive is offering equity at a $12.5 million valuation. Overall, that’s a reasonable valuation for a business like this one. The company generated $1.7 million in revenue last year for a revenue multiple of roughly 7.3 times. Given that RealtyHive is primarily a technology company with a built-out product and solid traction, that’s a competitive multiple. RealtyHive also has several streams of revenue, which reduces risk. Therefore, RealtyHive’s price rating is relatively high.

Market

Real estate is the largest asset class in the world. In the US alone, residential real estate was worth $31.8 trillion in 2017 with an additional $15 trillion in commercial assets and a $485 billion annual rental market. However, there have been relatively few disruptive advances in real estate technology. Zillow is probably the most famous tech company in this space, and it’s very valuable (with a nearly $30 billion market cap). Still, it doesn’t come close to covering the full scope of potential tech innovation in real estate. 

The US market for real estate technology is forecast to reach $20.6 billion by 2026 at a global compound annual growth rate of 5.7% over the next five years. That’s a pretty valuable market with decent growth potential, and venture capitalists agree. They poured $8.9 billion into real estate technology companies in 2019 — 300% more than they did in 2015. 

These are all positive signs for RealtyHive. Investors agree that real estate technology hasn’t reached its full potential yet, and they’re actively seeking opportunities to improve the process of buying and selling both homes and commercial properties. That’s why RealtyHive’s market rating is relatively strong.

Team

RealtyHive was founded by Wade Micoley, a longtime businessman and real estate investor. Micoley started his career as a real estate broker in the 1980s and was supposedly very successful. In 2000, he co-founded Nicolet National Bank, which was quoted as the fastest-growing bank in Wisconsin in 2009. After that, it seems that Micoley began developing an innovative real estate business under the brand Micoley.com. There are signals that RealtyHive was operating as early as 2012 or 2013 under that previous brand. However, Micoley’s LinkedIn states that he began working on RealtyHive in 2017. 

Beyond Micoley, the RealtyHive team includes several other experienced realtors and businesspeople. Mark Herman, an active real estate investor, is the company’s president and COO. He lends two decades of experience in banking, lending, and investments. Hugh Gilliam is RealtyHive’s director of international real estate and is also the co-founder of Doorways International, a luxury real estate platform spanning 70 countries. The team also includes several more licensed real estate agents in business development and client relations roles. 

All in all, the RealtyHive team is deeply experienced in the real estate industry. Multiple team members offer various perspectives on residential, commercial, and international real estate. The team is also very built-out for an early-stage company. However, it seems as though many team members (perhaps including founder Wade Micoley) devote time to other ventures outside of RealtyHive, namely as real estate agents. That’s a bit concerning, but nonetheless, the RealtyHive team is large and highly experienced. Thus, RealtyHive’s team rating is high.

Differentiators

There is lots of room for RealtyHive to run in the real estate technology industry, as there are relatively few established, nationwide competitors. Many real estate companies start regionally and hope to scale nationwide later on, which is RealtyHive’s approach. This approach allows multiple companies to thrive in distinct markets. In this fragmented landscape, RealtyHive does seem to stand out with the breadth of its product use cases and its traction with real estate agents. Agents have multiple ways to benefit from RealtyHive. They can show properties on the marketing platform, which supposedly generates more views than other platforms like Zillow. They can also build a robust marketing funnel for their own business by paying subscription fees to be promoted as “Signature Agents” and for forms of distinction. RealtyHive’s newest venture, the consumer Cashifyd app, also allows agents to bid competitively to win qualified leads. 

It doesn’t appear that there are any notable competitors with exactly the same approach to boosting prospects for both agents and consumers, so RealtyHive is highly differentiated. Though it’s worth noting that RealtyHive’s product is not particularly defensible. Another tech company with fast development cycles could likely add RealtyHive’s functionality to its existing platform relatively quickly, which presents a risk to RealtyHive. However, on the basis of competitiveness and differentiation, RealtyHive is strongly positioned. Thus, the company’s differentiation rating is quite high.

Performance

According to financial statements, RealtyHive began operating in 2019 and generated significant revenues very quickly. The company brought in $1.2 million that year with a strong gross profit of roughly $690,000. However, RealtyHive spent a significant amount on operational expenses outside of cost of goods sold and posted a net loss of $692,000. In 2020, the company generated $1.7 million in revenues and nearly $1.2 million in gross profit, which shows solid growth. Its net loss was more than $755,000. 

Those are very strong results for a brand-new technology company, and RealtyHive appears to have found early product-market fit very quickly. However, it’s important to note that it seems as though RealtyHive was actually operating before 2019 under a different brand/entity. Crunchbase lists RealtyHive’s founding date as 2012, and founder Wade Micoley has been operating a real estate business for more than 30 years. Therefore, there’s reason to believe that these financial results are really the culmination of almost a decade of slower growth, rather than quick results garnered in only two years. 

Nonetheless, RealtyHive has performed well in the last two years with strong profit margins that improved year over year. This type of technology business has great capital-efficient scale potential, and  RealtyHive projects it will hit profitability in 2023. As a result, RealtyHive’s performance rating is its strongest.

Risks

While RealtyHive is a relatively low-risk investment compared to many others on crowdfunding platforms, there are still a few key risks. Most importantly, it appears that RealtyHive’s founder is not dedicated full-time to the business, and the same goes for most other RealtyHive team members. That’s concerning in a company this young and could be a strong operational disadvantage if RealtyHive aims to compete nationally. RealtyHive’s financials also pose a risk in that growth between 2019 and 2020 was solid but not explosive, and it’s not clear how long the company actually took to generate $1.7 million in revenue (while RealtyHive says only two years, some evidence indicates that the company was founded in 2012). There is also a good amount of risk in the real estate market right now. Some market analysts believe the US is in a real estate bubble (or will be soon). If this is the case, the market might crash in the near future, disrupting market dynamics and causing unpredictable swings in RealtyHive’s business.

Bearish Outlook

The strongest negative signal about RealtyHive is the possibility that the company was actually founded in 2012, which would indicate that its business is slow-growing with limited market potential. While RealtyHive’s 2020 revenue of $1.7 million is very impressive if the company was founded two years ago, it’s much less impressive if the company was founded nine years ago. Combined with the founder’s involvement in other businesses, RealtyHive might not be attractive to investors. 

It’s also worth questioning whether RealtyHive’s core value proposition is valuable to consumers. It seems obvious that real estate agents appreciate the chance to market properties and advertise themselves to potential clients, but it’s less clear why the average home seller or buyer would use RealtyHive as opposed to many other real estate platforms such as Zillow. RealtyHive is betting on its consumer Cashifyd app, and it does sound appealing to get cash back on real estate transactions. However, the average payout is apparently only $375, which is probably too low to be compelling for the majority of consumers. Without strong consumer adoption, real estate agents will be floating around RealtyHive without any clients, which poses a strong risk to RealtyHive’s success. 

Bullish Outlook

On paper, RealtyHive seems to have almost everything going for it. Its valuation is quite reasonable given its traction and 2020 revenue, and the real estate technology market is growing steadily. The RealtyHive team has decades of experience in real estate, and they’ve built a well-differentiated product that has already achieved some measure of product-market fit. All of these positive signals have powered great results in the last two years. RealtyHive generated $1.2 million in revenue in 2019, which went up to $1.7 million in 2020. 

Current market conditions are also a strong selling point for RealtyHive. It’s more competitive than ever to be a real estate agent. Homes are entering bidding wars after one day on the market, so anyone looking to sell their home is likely looking for an agent right now. But the market is saturated with millions of agents who need a way to stand out, and RealtyHive (including its Cashifyd app) could offer them that. 

If RealtyHive can successfully scale its multiple revenue streams to capture business from additional real estate markets nationwide and ultimately international markets, its strong differentiation and gross margins could result in a lucrative return for investors.

Executive Summary

RealtyHive is a real estate platform designed to help real estate agents stand out to consumers. Consumers also benefit from property discovery, tailored agent recommendations, and the opportunity for cash back from buying or selling homes. RealtyHive’s team has decades of experience in all aspects of real estate, and those experienced brokers and agents have built a platform that resonates in the market. In 2020, supposedly only two years after founding, RealtyHive generated $1.7 million in revenue. 

On the other hand, RealtyHive may have been in existence for much longer, perhaps since the early 2010s. If that’s the case, $1.7 million in revenue after nearly a decade in business is not as impressive and might indicate that RealtyHive’s part-time team isn’t devoting the time necessary to scale RealtyHive quickly. There’s also a key question of whether RealtyHive’s platform is actually attractive enough to consumers, particularly given that its cash back functionality isn’t actually that lucrative. Therefore, RealtyHive has been rated a Neutral Deal. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com

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RealtyHive on Wefunder
$
Platform: Wefunder
Security Type: Equity - Common
Valuation: $12,500,000

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