Acorn Finance a technology platform that connects users with home equity loan offers from financial institutions for home improvements, raised a $8.4 million Series A fund led by MassMutual Ventures. Moderne Ventures and previous investors Vestigo Ventures, Accomplice and MetaProp also participated in Tuesday’s round, bringing the proptech’s total funding to $12.4 million.
Fresh capital in the bank, Acorn has big plans for its marketplace technology.
Launched in 2018, Acorn (not to be confused with investing app Acorns) operates both a business-to-consumer and business-to-business model where it works with contractors who do home improvement work. Acorn can offer loans for as little as $500 and as much as $500,000 – so whether landlords need repairs on an old fridge or want to attach an entirely new garage, financing options are available to homeowners, home investors and contractors.
Acorn doesn’t do the actual lending of course, this is left to the financial institutions it works with. However, Acorn makes a fee from the lenders who make loans through the platform itself.
Its latest funding round will allow Acorn to expand the number of lenders in its marketplace by including regional banks and credit unions and process loans almost instantaneously instead of next day. The proptech also plans to slash application time in half, and improve its algorithms to help borrowers choose the right offer based on specific criteria including location, how quickly they need the money, the type of project and their credit risk.
According to Giri Addanki, CEO and founder of Acorn Finance, the raise will also allow Acorn to double its headcount.
The company already witnessed an explosive year in 2021 as the number of customers applying for loans through the Acorn Finance platform and Acorn’s revenue grew by 800%. Its a fruitful industry to be embedded in with home improvement sales expected to reach $510 billion by 2024.
As part of the round, Eric Emmons, managing director of MassMutual Ventures, will join the Acorn Finance Board of Directors alongside Michael Nugent, managing director of Vestigo Ventures, who has been on the board since 2019.
“Acorn’s embedded lending marketplace increases consumer choice while improving proposal ticket size and conversion rates,” said Emmons. “The team’s outstanding combination of vertical-specific expertise and consumer credit allows them to deliver a unique solution for SMB and service businesses.”
MassMutual is no stranger to the proptech universe having previously invested in Building Engines, a provider of web and mobile property management software for commercial real estate and Awning, a platform and brokerage built exclusively for single-family rental home investments.