Patch Homes, a home equity financing platform that creates a way for existing homeowners to cash out equity at 0% interest with no monthly payments, today announced it is coming out of private beta in California. The company recently secured $1.0 million in seed funding, led by prominent venture capital firms and fintech angel investors, including Techstars Ventures, KIMA Ventures, Eric Di Benedetto and Airbnb co-founder Nathan Blecharczyk, among others.

"There's a problem with the current home financing market, in that 67% of homeowner wealth is trapped in home equity," said Sahil Gupta, Co-founder of Patch Homes. "Most homeowners are asset-rich but cash-poor, and we want to help bridge that gap and solve their cash flow problems. Our model offers home equity financing without any monthly payments, allowing homeowners to tap into their home equity and use their money the way they choose, whether to pay down debt, invest in their future, or make needed home improvements."

In exchange for 0% interest, Patch Homes shares in future appreciation or depreciation of the home value. The model allows customers to receive capital from investors to finance their home equity, without interest rates or monthly payments, in exchange for a fraction of future home value change. Both the homeowner and investor will see a profit when the home appreciates in value and Patch Homes will share in downside loss with homeowners, should the house decrease in value.

"Patch Homes is doing something extremely innovative - they are targeting a market that has remained untapped for years," said Jason Seats, Managing Partner of Techstars Ventures. "There is a gap in the real estate market when it comes to home equity loans. We've been very impressed by the team and company's progress in the past six months and are excited about its potential."

Each contract has a 10-year term, although homeowners have the option to exit the contract by selling or refinancing their home at any time before that, without any penalty or exit fees. In the meantime, homeowners can use the cash newly freed up from home equity however they choose.

"What's unique about Patch Homes is that it's solving a problem for more than 40% of US homeowner population," said Eric Di Benedetto, an investor in Patch Homes, an early backer of Lending Club and an active real estate investor. "Now, homeowners will have more options when it comes to tapping their equity, especially as bank lending has reduced. By aligning the interests of homeowners and investors, Patch Homes is creating a win-win solution for many stakeholders in the real estate space."

The company has reached several key milestones in the past year, including launching a digital financing portal for homeowners and bringing investor capital to the company platform.

"I'm very impressed with both the Patch Homes team and the solution they built," said Vincent Jacobs, partner at London based Kima Ventures. "The home equity space is a largely untapped marketplace, and Patch Homes' innovative underwriting and risk model is expanding credit to underserved homeowners."

Patch Homes was founded by Sahil Gupta and Sundeep Ambati, who combined have over 18 years of experience across consumer fintech startups, real estate and institutional investment firms. Prior to Patch Homes, Gupta has worked at notable firms, including Motif Investing and BNY Mellon. He holds an MS in Computational Finance from Carnegie Mellon. Ambati is a serial entrepreneur in the real estate industry, co-founding A&A Property Management and Siri Properties. Previously, he worked at Starwood Properties/Waypoint Homes and Mission Housing Development Corp.

"Throughout our beta program, we saw homeowners engage deeply with the product and debt-payoff was among the top reasons for cashing out equity." said Sundeep Ambati, Co-founder of Patch Homes. "We're excited about bringing a new approach to the way Americans look at financing their homes. There is over $4.5 trillion in untapped home equity across millions of homeowners in the US. They want something that is suited to their needs and financial circumstances."

The seed funding will enable Patch Homes to expand its team and geographical footprint, and continue to develop its innovative solution and assist with marketing efforts. Patch Homes currently serves homeowners in California, with plans to expand to additional states before the conclusion of the year.

For more information, please visit www.patchhomes.com.

About Patch Homes
Patch Homes is at the forefront of revolutionizing home financing. Our innovative financing solution is built to reduce homeowner's debt burden and monthly payments. With our product, we are pioneering a new way to cash-out home equity by offering homeowners home equity financing at 0% interest and no monthly payments.