RRE Ventures is excited to announce our Series A investment in Knock, the modern way to sell your home. Knock — co-founded by former Trulia founding team members Sean Black and Jamie Glenn, along with co-founder and Chief Architect Karan Sakhuja — utilizes historical market and transaction data, machine learning, and intelligent pricing algorithms to predict home prices with unparalleled accuracy and to alleviate the pain of selling (and buying) a home. By guaranteeing individuals the ability to sell their home within 6 weeks, Knock reduces the hassle, uncertainty, and inefficiency of selling a home. And by offering to buy homes outright from homeowners, Knock solves a key pain point for the 47% of US homebuyers who must sell their existing home in order to afford a new one.
The proliferation of tech-enabled marketplaces represents disruption at its best. In aggregating a near limitless number of potential buyers and sellers, these marketplaces have the potential to increase price transparency and drive transactional efficiency. This not only creates value for businesses, but drives significant value to consumers, saving people money and time. And nowhere are these savings more important than in the residential real estate market, given that buying a home is often the most significant financial decision an individual will make.
Over the past several years, the promise of fully efficient marketplaces has been realized even in historically slow-moving industries like commercial real estate. Today, startups like 42Floors and The Square Foot (an RRE portfolio company) are bringing commercial listings online, while Hightower (another RRE portfolio company, which recently merged with VTS) is driving efficiency by arming brokers with intelligent tools for managing leasing workflows.
Yet despite this proliferation of new marketplace businesses, one space has been left behind. Until now, there has been no true tech-enabled marketplace for selling residential real estate. We believe that this market is finally ripe for disruption, and there exists no better team to execute against Knock’s vision.
By bringing listings online in a searchable way, companies like Zillow create transparency in the residential real estate market, enabling consumers to search directly for properties. However, the actual transaction process remains time consuming, inefficient, and expensive for sellers and buyers alike. While Zillow renders properties searchable, potential buyers and sellers are still forced to contact a broker, hire a series of professionals to assist with the closing process, and wait months to complete a transaction. And the stakes are high; if a sale falls through, a family may no longer be able to afford the new house they were planning to buy.
Knock solves this problem in an elegant and thoughtful way. The immediate resonance of Knock’s value proposition with consumers serves as further evidence that despite the prevalence of online real estate listings, actually buying and selling a home remains a legacy experience. Fundamentally, Knock is a transaction-oriented marketplace for real estate. Two of Knock’s co-founders having deep domain expertise as founding team members of Trulia made Knock an especially compelling investment for us. Moreover, the rest of the Knock team are uniquely positioned to solve this problem. The promise of Knock is that a homeowner can sell his or her house within six weeks, or that Knock will buy it directly. This is the promise of the truly efficient marketplace. We couldn’t be more excited to work with Sean, Jamie and the rest of the team at Knock.
(Thank you to my RRE colleague Cooper Zelnick for helping with this post)