Flyhomes Shifts Focus to Financial Products, Exits Brokerage Business
In a significant strategic pivot, Seattle-based real estate startup Flyhomes announced this week that it is exiting the direct brokerage business to concentrate entirely on its “Buy Before You Sell” financing product. The move represents a fundamental shift in how the company, founded in 2016, approaches the real estate market. Rather than maintaining its own team of real estate agents who work directly with homebuyers, Flyhomes is transitioning its in-house agents to The Real Brokerage by the end of September. This change allows the company to adopt a wholesale distribution model, partnering with external loan officers and real estate agents who can offer Flyhomes’ specialized financial products to their clients. The timing of this announcement comes shortly after the company secured a $15 million Series D funding round in July, specifically designed to support this strategic reorientation.
The cornerstone of Flyhomes’ new business model is its flagship “Buy Before You Sell” program, a financing solution that addresses a common challenge in real estate transactions. This innovative product enables homeowners to purchase their next property before selling their current one, eliminating the stress and uncertainty of timing that often complicates moving. The program works by helping buyers leverage the equity in their existing homes for down payments on new properties, essentially allowing them to make strong, cash-like offers that stand out in competitive markets. This approach gives homebuyers significant advantages in tight real estate markets where sellers often prefer cash offers for their certainty and speed. By solving this particular pain point in the home buying and selling process, Flyhomes has identified a specialized niche that differentiates it from traditional brokerages and mainstream mortgage providers.
The company’s strategic shift toward wholesale distribution comes with impressive reach. Already operating in 36 states, Flyhomes has built partnerships with a network of more than 30,000 loan officers who can offer its products to their clients. This extensive distribution network suggests the company sees greater potential in scaling its financial products through third-party professionals rather than maintaining its own customer-facing brokerage operation. As part of this transition, Flyhomes also sold its consumer home search technology and related assets to The Real Brokerage, further demonstrating its commitment to focusing exclusively on its financing solutions. The $15 million Series D round that supports this pivot came from a group of existing investors, including prominent venture capital firms Andreessen Horowitz, Norwest, Canvas Ventures, and Camber Creek, as well as individual investors Al Goldstein and Mark Vadon.
The journey to this strategic pivot hasn’t been without challenges for Flyhomes. Since its founding in 2016, the company has weathered significant turbulence in the real estate market, particularly in recent years as rising interest rates dramatically altered housing demand patterns. These market headwinds forced Flyhomes to implement multiple rounds of layoffs as it adjusted to changing conditions. Despite these challenges, the company has built an impressive track record, facilitating more than $7 billion in real estate transactions to date. The pivot to focus exclusively on its financing products may represent a more sustainable path forward in an industry known for cyclical volatility and thin margins. By specializing in a unique financial product rather than competing directly with thousands of traditional brokerages, Flyhomes appears to be carving out a more defensible position.
From a financial perspective, Flyhomes has attracted substantial investment throughout its history, raising a total of $208 million in equity funding across multiple rounds. Prior to this latest $15 million Series D round, the company raised a much larger $150 million Series C round in 2021, during a period of extremely high activity in the housing market. The substantial difference in size between these two most recent funding rounds might reflect both the changed market conditions and the company’s more focused approach to business. While Flyhomes declined to disclose its current headcount, the transition away from maintaining its own brokerage team likely means a leaner organization focused on product development and partnership management rather than direct consumer sales. CEO and co-founder Tushar Garg continues to lead the company through this strategic transformation.
This pivot by Flyhomes illustrates broader trends in the proptech sector, where companies are increasingly specializing in specific parts of the real estate transaction rather than attempting to reinvent the entire process. After years of startups promising to completely transform real estate, many are now finding success by addressing particular friction points in the traditional buying and selling process. For Flyhomes, the focus on helping buyers purchase before selling represents a targeted solution to a specific problem rather than a wholesale disruption of real estate transactions. This approach may prove more sustainable in the long run, especially as housing market conditions continue to evolve with changing interest rates and supply constraints. The company’s nationwide rollout of its products, supported by its recent funding, suggests confidence that its financing solutions will resonate with homebuyers across diverse markets, even as it steps back from directly serving those buyers as a brokerage.
