In a world where soaring interest rates challenge many aspiring homeowners, Requity Homes, a Toronto-based proptech startup, emerges as a beacon of hope. With its innovative rent-to-own platform, Requity Homes is dedicated to transforming the dream of homeownership into a reality for Canadians. As 2024 unfolds, the company plans to strengthen its presence in current markets, thanks to a substantial funding boost of $26 million CAD received in late December.
Bridging the Homeownership Gap
Requity Homes has set a clear goal: to assist families in transitioning from renters to homeowners. Amy Ding, the CEO of Requity, emphasizes the company’s focus on more affordable housing markets. “With an average home price of $300,000, our funds can support several families in smaller cities, unlike in Toronto, where the impact would be significantly less,” Ding explains.
This seed round, co-led by Highline Beta and Sam Sun, chairman of Zhuhai Asset Management Company, combined equity and debt financing. It attracted notable participants such as Boardwalk Investment, Conconi Growth Partners, Archangel Adrenaline Fund, and various angel investors. While the exact breakdown of equity and debt remains undisclosed, the equity part is earmarked for team expansion and executing growth plans, whereas the debt portion will finance home purchases for clients.
A Vision of Sustainable Homeownership
The journey of Requity began with a $1.2-million pre-seed financing round in 2022 and ambitions to create a $10 million fund for buying homes for clients. Today, with a new funding round, Requity has established a partnership for financing these real estate purchases. Mike Dobbins of Framework Venture Partners, a returning investor, will join Requity’s board, bringing his valuable mentorship and experience to the table.
Requity’s platform simplifies the home-buying process by integrating technology for credit and banking assessments. Approved clients are allocated a budget to select a home, which Requity purchases. The clients then rent these homes, with a portion of the rent contributing towards a down payment, eventually allowing them to buy the home at a pre-agreed price.
Navigating Through Challenging Markets
While similar models exist in the U.S., like Landis and Divvy Homes, Requity stands unique in Canada with its approach. Despite the challenging real estate market and high interest rates, Requity has avoided downsizing, a fate not shared by all in the industry.
The backdrop of this growth is a Canada in need of more housing. A 2023 report by the Canada Mortgage and Housing Corporation (CMHC) highlighted the need for 3.5 million additional housing units. This report aligns with the Canadian government’s commitment, announced in August 2022, to build 17,000 new homes, with a portion of the funding supporting rent-to-own initiatives.
Requity targets areas beyond the Greater Toronto and Vancouver regions, focusing on smaller cities where families and newcomers seek homes with backyards, not just apartments or condos. The company began its journey in Northern Ontario and has now expanded across Saskatchewan, Alberta, and Manitoba.
Looking Ahead with Confidence
Despite not planning further expansion in 2024, Requity is optimistic, driven by significant interest from thousands of applicants. The startup prides itself on helping dozens of families, with 80% of its early customers successfully purchasing their rented homes.
As it continues to grow, Requity aims to develop new partnerships and expand across Canada by 2026, cementing its role as a key player in making homeownership accessible and achievable in an ever-evolving housing market.
