SEATTLE, Oct. 27, 2021 (GLOBE NEWSWIRE) — Porch Group, a leading vertical software and InsurTech company reinventing the home services industry, today announced the acquisition of Floify, a leading provider of digital mortgage automation and point-of-sale software for mortgage companies and loan officers. The acquisition continues Porch’s strategy of providing software to companies involved in key moments of the homebuying process and expands its early access to high-intent homebuyers who need key services including insurance, warranty and moving services.
Floify Acquisition Overview
Based in Boulder, Colorado, Floify helps mortgage companies and loan officers create a better mortgage and refinancing experience for their customers. Floify’s digital mortgage automation and point-of-sale software streamlines the loan origination process by providing a secure application, communication, and document portal between mortgage lenders, borrowers, real estate agents, and other mortgage stakeholders. Loan officers use Floify to collect and verify borrower documentation, track loan progress, communicate with borrowers and real estate agents, and close loans faster. During 2021, Floify has helped these loan officers process on average 77,000 mortgage applications each month.
Strategic Rationale
- History of strong operational and financial performance. Floify has grown its annual recurring revenue (ARR) by 72% CAGR since Q1 2017. With more than 1500 companies currently using its software, Floify saw 130% annual net revenue retention as of Q2 2021 and expects $15 million of revenue in 2022. Floify is a profitable business, growing rapidly, with an expanding base of satisfied SMB and enterprise company clients. Virtually all of Floify’s revenues are recurring B2B software fees. Floify is anticipated to operate at similar margins to Porch’s overall business and is expected to contribute $2 million in revenue to Porch for the balance of 2021 post-close.
- Provides Porch entry to the mortgage origination market through best-in-class software: Floify’s flexible solution helps mortgage companies and loan officers deliver a simplified process to borrowers. For Porch, adding relationships with mortgage companies in addition to those with home inspectors, title companies, and moving companies, is an important step in Porch being able to simplify home purchasing and moving.
- Enhances Porch’s early access to homebuyers. Floify’s access to borrowers at the start of the mortgage application provides Porch an early introduction to high-intent homebuyers in need of other home related services. Approximately 70% of Floify’s transactions in 2021 were from home purchases. Porch plans to expand the Floify offerings to help mortgage companies provide an even better homebuying experience for their customers by assisting with additional services for their new home, including insurance, home warranty, moving, TV/internet, and more. This transactional revenue layered on top of Floify’s solid and growing SaaS fees, is expected to help Floify further improve its already strong 10.5x LTV/CAC as of the first half of 2021 and thus allow for continued investments in profitable growth.
“Floify has an impressive presence and unique position in the mortgage origination software business,” said Matt Ehrlichman, Porch founder, Chairman and CEO. “There are very few companies providing software to loan officers to help improve the borrower experience, and we are excited for Porch to now be one of the major players in this vertical. We look forward to investing to further to help Floify customers stand apart by making the home purchasing and moving process easier for homebuyers. With this acquisition, Porch now has a leadership position in providing software to most of the key fragmented home services industries where companies work with homebuyers at key moments in the home journey.”
Transaction Highlights
Porch acquired Floify for $76.5 million of cash and $10 million of Porch common stock at closing (based upon the volume weighted average trading price of our common shares for the five trading days prior to October 26, 2021). Porch is guaranteeing the Sellers that the $10 million of Porch common stock will double in value by the end of 2024 with respect to any such Porch shares retained by the Sellers throughout that period. This guaranty will be marked to market quarterly through our P&L in accordance with GAAP.
Advisors
Manatt, Phelps & Phillips, LLP served as legal advisor to Porch. AGC Partners served as financial advisor to Floify. Sheppard, Mullin, Richter & Hampton LLP served as legal counsel to Floify.
Conference Call and Webcast Information
Porch management will host a conference call and webinar to discuss this transaction and its business update today, October 27, 2021, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). The presentation will be accompanied by a slide presentation available on the Investor Relations section of the Company’s website. A question-and-answer session will follow management’s prepared remarks.
All are invited to listen to the event by registering for the webinar here.
To access the webinar by telephone, please see below:
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If you have any difficulty connecting with the conference call or webcast, please contact Porch’s investor relations team at (949) 574-3860 or PRCH@gatewayir.com.
A replay of the webinar will also be available in the Investors section of Porch’s corporate website.
About Porch Group
Seattle-based Porch Group, the vertical software platform for the home, provides software and services to more than 17,000 home services companies such as home inspectors, moving companies, real estate agencies, utility companies, and warranty companies. Through these relationships and its multiple brands, Porch provides a moving concierge service to homebuyers, helping them save time and make better decisions on critical services, including insurance, moving, security, TV/internet, home repair and improvement, and more. To learn more about Porch, visit porchgroup.com or porch.com.
About Floify
Floify is a digital mortgage automation and point-of-sale software solution that streamlines loan origination by providing a secure application, communication, and document portal between lenders, borrowers, referral partners, and other mortgage stakeholders. Lenders use Floify to collect and verify borrower documentation, track loan progress, communicate with borrowers and real estate agents, and close loans faster. Floify is based in Boulder, Colorado. For more information, visit the company’s website at floify.com or on social media at Facebook, LinkedIn, or Twitter.