Ribbon is a startup working to give homebuyers a competitive edge when making offers to sellers.
How? With cold hard cash.
Buying a home is a lot more involved than going online, picking the house you want and clicking “Add to Cart.” The vast majority of homebuyers have to take out a mortgage, which adds a bunch of extra steps to the process — buyers need to find the right lender, find a good rate, have good credit and go through the approval process.
These extra steps makes a buyer less attractive to sellers than a real estate investor who can afford to pay the full price in cash.
So Ribbon steps in on the behalf of the buyer to make that full cash offer. The company then reserves the house for that buyer, who pays rent to Ribbon until they secure their mortgage. The benefit of using Ribbon is that buyers can close quicker, are a more appealing choice to sellers. And sometimes, sellers give discounts for cash offers.
The company says it saves buyers $10,000 in cash discounts on average.
Now Ribbon is expanding this model thanks to a recently closed $30 million Series B. Ribbon announced the funding on Tuesday, along with another $300 million in debt facility secured from Goldman Sachs. The company also said Goldman Sachs may increase the debt capacity by an additional $220 million.
Last year Ribbon raised money in a similar way, announcing that it secured $225 million between its Series A and debt financing.
“Homebuyers, homesellers, real estate agents and lenders are all enthusiastically working with Ribbon to streamline the real estate transaction and deliver a frictionless buying and selling experience,” Ribbon CEO Shaival Shah said in a statement. “We’re grateful for the confidence our investors have shown in our business model with this round of funding, and excited about the opportunity to bring our products and services into new markets and design new product solutions. We are expanding our platform to help even more families who have homes to buy and sell and families who are buying their first homes.”
Ribbon is based out of New York, but operates in Charlotte, Raleigh, Nashville, Atlanta, Charleston, Greenville, Memphis and Knoxville. The company plans to expand to 12 more markets by the end of 2020.
Ribbon has also grown tenfold over the last 12 months. It now employs 60 people full-time.
