Richr
About this raise
Richr, with a valuation of $20 million, is raising funds on StartEngine. The company has developed a platform that helps in the seamless sale of homes. Richr enables sellers to sell their homes, close the transaction, and invest their home sale proceeds to build generational wealth. The business has title and RE brokerage services in five states and has partnered with RealManage, the second-largest property manager in the US. Richr reported a 58% year-over-year revenue growth in 2023, with a 65% gross margin and $2.5 million seller savings. Glenn Orgin and Jason Rubin founded Richr in October 2018. The current crowdfunding campaign has a minimum target of $14,998.30 and a maximum target of $1.23 million. The campaign proceeds will be used for marketing, company employment, technology, and expansion.
Investment Overview
Not Funded: $6,211
Deal Terms
Company & Team
Company
- Year Founded
- 2018
- Industry
- Real Estate & Construction
- Tech Sector
- Distribution Model
- B2C
- Margin
- High
- Capital Intensity
- Low
Financials
- Revenue +61% YoY
- $534,553
- Monthly Burn
- $60,000
-
Runway
- 1.7 months
- Gross Margin
- 83%
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Synopsis
The process of selling a home can often be complicated, time-consuming, and costly for homeowners. Richr aims to simplify this process with a platform designed to facilitate seamless home sales, enabling sellers to close transactions efficiently and invest their home sale proceeds to build generational wealth. Richr provides title and real estate brokerage services in five states and has partnered with RealManage, the second-largest property manager in the US. Richr Money is the wealth-management arm of Richr and helps home-sellers invest proceeds into Stocks, Bonds, ETFs, and funds.
Richr's platform is tailored to assist homeowners in navigating the complexities of home sales, from listing to closing and beyond. The company has reported a 58% year-over-year revenue growth in 2023, achieving a 65% gross margin and resulting in $2.5 million in seller savings.
Furthermore, Richr has a significant partnership with RealManage, granting it access to over 1 million HOA clients across the US, with approximately 7% selling annually. This partnership positions Richr as the preferred broker, title agent, and wealth management provider for these homeowners, enhancing its market reach and customer base.
With 2023 revenue of $534k and having raised $2.8 million in prior rounds, Richr is focused on growth. The company is raising additional funds to support marketing efforts, expand its team, enhance technology, and further its expansion plans. The ongoing crowdfunding campaign on StartEngine has set a minimum target of $14,998.30 and a maximum target of $1.23 million.
Price
Richr is currently raising funds on StartEngine with a pre-money valuation of $20 million, offering preferred equity at a price of $2.30 per share. This valuation positions Richr at a revenue multiple of 37.42x, which is relatively high for the real estate and construction industry. The company reported annual revenue of $534,553 with a 58% year-over-year growth rate in 2023, indicating significant traction and potential for future growth.
Investing in preferred equity provides several advantages over common equity, including priority in dividend payments and liquidation preferences. This can offer a degree of protection for investors, especially in the early stages of a company's development. However, it is important to note that the high valuation multiple suggests a premium price, reflecting the company's growth potential and market positioning.
For investors aiming for a 10X return, Richr would need to achieve a post-money valuation of approximately $200 million (not accounting for dilution). Given the company's current pre-money valuation and growth trajectory, this would require substantial scaling and market penetration. While the company's 58% annual revenue growth and high gross margin of 65% are promising indicators, achieving this level of return would necessitate continued robust performance and expansion.
Market
Richr operates within the highly competitive US Real Estate Sales & Brokerage market, which is valued at approximately $228.1 billion. The market is characterized by its slow growth rate of 1.9%, reflecting a mature and saturated industry. While there are quite a few online real estate brokers such as Homie, Richr differentates itself by offering a one-stop solution for RE brokerage, Title/Closing, Escrow, as well as wealth management and investment solutions.
The real estate industry is known for its stringent regulations, but Richr has managed to navigate these very well and save homeowners $2.5M in sellers fees. However, the market's extreme competitiveness necessitates continuous innovation and robust marketing strategies to maintain and grow market share.
Overall, Richr’s unique value proposition of not only facilitating home sales but also providing wealth management services positions it favorably in the real estate market. The company's impressive growth metrics and strategic partnerships indicate strong potential for further expansion and success in an otherwise slow-growing industry.
Team
Richr is led by co-founders Glenn Orgin and Jason Rubin, who bring a combined 26 years of industry experience to the company. As CEO, Glenn Orgin has nearly 14 years of relevant industry experience having served as a Partner at real estate investment firm The Faith Group for nearly 12 years.
Chief Development Officer Jason Rubin brings 12 years of industry experience to the team having served as Principal at Rubin Real Estate Investment Group since 2012. He also operates his own law firm called Law Offices of Jason Rubin. Although he seems to be working on Richr part-time, he has a great skillset in real estate investment and law that will help Richr continue to navigate real estate regulations as the company continues to scale.
Serena Orgin serves as Richr's Title Agent, and has been practicing law since 2013. Her skillset is also invaluable to ensuring that all transactions on the Richr platform are compliant and within regulation.
Differentiation
Richr aims to differentiate itself in the extremely competitive real estate market by offering a comprehensive platform that not only facilitates the seamless sale of homes but also assists sellers in closing transactions and investing their proceeds to build generational wealth via Richr Money (the company's weath management arm). Unlike many traditional real estate platforms, Richr integrates title and real estate brokerage services, which are currently available in five states. This integration simplifies the process for sellers, reducing the need to engage with multiple service providers.
One of Richr's significant differentiators is its strategic partnership with RealManage, the second-largest property manager in the US. This partnership positions Richr as the preferred broker, title agent, and wealth management provider for over one million HOA clients across the country, with an estimated 7% of these clients selling annually. This relationship not only expands Richr's customer base but also enhances its credibility and reach within the real estate market.
Performance
Richr has shown promising performance in the highly competitive real estate brokerage industry. The company reported a 58% year-over-year revenue growth in 2023, demonstrating its ability to scale effectively within its market. This growth has been supported by a robust gross margin of 65%, highlighting the efficiency of its business model and operational strategy.
With an annual revenue of $534,553 in 2023, Richr is generating significant traction in its early stage. The company has successfully facilitated $2.5 million in seller savings, which underscores the value proposition of its platform in helping homeowners maximize their returns.
Financially, Richr has managed to raise $2.8 million in prior funding rounds, providing essential capital to fuel its growth. However, the company's most recent cash on hand stands at $100,000, with a monthly burn rate of $60,000. This indicates a limited runway and a need for additional funding to sustain its operations and continue its expansion.
Overall, Richr's performance metrics indicate strong growth potential, but the company will need to secure additional funding to maintain its momentum and achieve its long-term objectives. The ongoing crowdfunding campaign aims to address this need, with proceeds earmarked for marketing, company employment, technology, and expansion efforts.
Risk
Investing in Richr presents several unique risks that potential investors should carefully consider. Firstly, the company operates in an extremely competitive real estate market. With numerous established players and new entrants, gaining and maintaining market share in this sector can be challenging. The company's ability to differentiate itself and sustain its growth is critical to its long-term success.
Richr is currently in the pre-profit stage and incurred a net loss of $888k in 2023. The ongoing financial losses indicate a dependency on external funding to support operations and growth initiatives. Should the company face difficulties in securing additional funding, it could severely impact its ability to continue operations and execute its business strategy.
The company also faces operational risks associated with its service offerings. As Richr expands its title and real estate brokerage services across more states, it must navigate various state-specific regulations and compliance requirements (currently only operating in 5 states). Any failure to comply with these regulations could result in legal issues or penalties, potentially harming the company's reputation and financial standing.
Another risk involves the platform's long sales cycle, which can affect cash flow and revenue consistency. Real estate transactions typically take time to close, which can result in delayed revenue recognition and cash flow challenges. This issue is compounded by the fact that Richr needs a long time to scale its sales and distribution efforts, further impacting its short-term financial stability.
Bullish Outlook
Richr is poised for significant growth within the highly competitive real estate market, driven by its innovative platform designed to streamline home sales and help sellers build generational wealth. The company's impressive 58% year-over-year revenue growth in 2023 and a high gross margin of 65% are strong indicators of its market viability and operational efficiency. Additionally, with a $2.5 million seller savings, Richr demonstrates tangible value to its customer base, enhancing its competitive edge.
The strategic partnership with RealManage, the second-largest property manager in the US, is a notable advantage, granting Richr access to over 1 million HOA clients nationwide. This partnership not only broadens Richr's market reach but also solidifies its position as a preferred broker, title agent, and wealth management provider. Operating in five states with title and real estate brokerage services, Richr is well-positioned to expand its footprint and capitalize on the vast opportunities within the US Real Estate Sales & Brokerage market.
Bearish Outlook
Richr's valuation at over $20 million appears inflated given its current annual revenue of $534,553. With a revenue multiple of 37.42x, Richr's valuation is high compared to industry norms, raising concerns about overvaluation, which can limit the upside potential for investors.
Financially, Richr is burning cash at an alarming rate. With a monthly burn rate of $60,000 and only $100,000 in cash on hand, the company’s runway is severely limited. This raises questions about its ability to sustain operations without frequent capital raises, potentially diluting existing shareholders.
Additionally, Richr operates in the extremely competitive real estate market, which is dominated by established players with significant resources. The high barriers to entry make it challenging for new entrants to gain a foothold and sustain growth. Despite partnerships with RealManage and a presence in five states, the crowded and legacy nature of the market poses significant obstacles to achieving substantial market share. Expanding into new states requires compliance with different state regulations, which will significantly delay Richr's ability to scale in the near-term.
Moreover, Richr's net income for the most recent fiscal year stood at a loss of $888,586, further emphasizing the financial challenges the company faces. While the platform shows promise with its unique value proposition, the current financial metrics and competitive landscape suggest that Richr may struggle to achieve its ambitious goals without significant improvements in its financial health and market position.
Executive Summary
Richr is a real estate technology company that aims to streamline the home-selling process and help sellers invest their home sale proceeds to build generational wealth through its wealth management arm, Richr Money. Richr has developed a platform that simplifies selling homes, closing transactions, and offering title and real estate brokerage services in five states.
The company has demonstrated significant growth, reporting a 58% year-over-year revenue increase in 2023 and achieving a 65% gross margin. Richr's annual revenue stands at $534,553, and the company has saved sellers $2.5 million. Richr has also established a strategic partnership with RealManage, the second-largest property manager in the U.S., positioning itself as the preferred broker, title agent, and wealth management provider for over 1 million HOA clients across the country, with 7% selling annually.
Richr is currently in the early stage of development and is raising funds through a crowdfunding campaign on StartEngine. With a pre-money valuation of $20 million, the company aims to raise between $14,998.30 and $1.23 million. The proceeds from this campaign will be allocated towards marketing, company employment, technology, and expansion efforts.
Despite its promising growth metrics and high margins, Richr operates in an extremely competitive market with high barriers to entry. The company's monthly burn rate is $60,000, and it has $100,000 in cash on hand, indicating the need for additional funding to sustain and accelerate growth. However, Richr has raised nearly $2.8 million in prior funding rounds, reflecting some investor confidence in its business model and growth potential.
Richr's has a high margin level, which could be advantageous in achieving profitability. However, the company is currently pre-profit and reported a net income loss of $888,586 in the most recent fiscal year. Aditionally, the company's valuation multiple of 37.42x suggests it may be overvalued, particularly given the competitive landscape and the crowded market.
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Company Funding & Growth
Funding history
- Total Prior Capital Raised
- $1,849,995
- VC Backed?
- No
Close Date | Platform | Valuation | Total Raised | Security Type | Status | Reg Type |
---|---|---|---|---|---|---|
07/01/2024 | StartEngine | $20,002,725 | $6,211 | Equity - Preferred | Not Funded | RegCF |