ZeroDown earns money from its $10,000 cost and via a 24/7 concierge service it provides to clients. It’s complied using Sheltr to connect ZeroDown users to services they may need as homeowners, including a babysitter or a plumber, for example.
Seperately, but things get more complex, and that’s why a solution such as this hasn’t come from Silicon Valley in the past.
Finally, the trio raised a bucket of capital at a valuation north of 70 million, sources affirm to TechCrunch, (the company declined to comment on its valuation). That’s really the expectation of confidence for a capital-intensive property industry but the founders reputation preceded them and early backing from Altman, that spent before the company chose to go into YC, peaked the curiosity of early-stage VCs.
ZeroDown co-founder and chief executive officer Abhijeet Dwivedi.
“The finance has to do its job to maintain the resources and offer a return and the technology firm has to do its job of executing very well,” Dwivedi said. “The templates to run both these kinds of companies exist independently on the industry. ”
Here’s how the service operates:
To finance Y Combinator’s leading startups, VCs scoop them before Demo Day
For now, ZeroDown is concentrated on that industry but in the very long run, the group hopes they can expand to new geographies and assist a wider and more diverse population of possible homeowners.
ZeroDown appears to be serving those who have an individual or joint salary of more than $200,000, stock options plus some cash put away — aka not exactly your ordinary Joe.
Parker Conrad, the co-founder of all Zenefits, likewise opted to go through YC with his most recent startup, Rippling.
“Possessing things is a pretty central concept to the American business,” said Abhijeet Dwivedi, the co-founder and chief executive officer of ZeroDown, also a new startup hoping to make property ownership at the Bay Area a reality for people by blending the security of ownership together with the flexibility of renting. By possessing things “ Anyone who has gotten rich at the last 240 years has achieved so. ”
At just a few months older, the San Francisco-based startup was fielding offers. Why?
Sure, even if your startup went public, you may be amongst a small category of individuals able to place in all-cash offers over the asking price. However, most people residing in the Bay Area, even people that have six-figure salaries aspire to become homeowners.
ZeroDown, as its name implies, couples technologies and a debt-fueled property finance to permit home-buyers to forgo the standard down payment procedure needed to purchase a home. The organization, which charges a $10,000 commission per house, is a graduate of this Y Combinator
startup accelerator’s chilly cohort
- ZeroDown determines whether a potential customer qualifies, factoring in total yearly income before taxes, inventory grants, recurring monthly payments and charge. ZeroDown purchases the house.
- The customer begins leasing the home from ZeroDown.
- The customer is given five years to pay ZeroDown the cost of the down payment.
- Each month during the five-year period, the consumer earn purchase-credits — like making stock options in a startup — that represent a proportion of their ZeroDown house ’s value. If they live in the home for at least 2 decades, they can place those credits toward purchasing the house or they could can move out following two decades and exude the purchase-credits for money .
- When a customer reaches the mark and wishes to stay put, they must buy the home at that time.
Even San Francisco residents that are wealthy can’t purchase a house.
The point is to give individuals more flexibility and power in the home-buying process: “It gives individuals time to develop more savings or find a higher salary,” Dwivedi describes. “Their purchasing power out five years is hopefully higher than it is now. ”
TechCrunch mentioned all this in a narrative before this year highlighting how competitive investing in YC startups can be for venture capitalists. ZeroDown might have raised in the highest valuation for a startup fresh from YC but it certainly wasn’t the sole member of the chilly cohort to raise substantial capital prior to graduating out of the accelerator.
ZeroDown is tapping into a specific annoyance point, one intensified in the Bay Area in which 81 percent of houses cost more than a million, based on data gathered by Trulia .
ZeroDown didn’t need to create a gaudy pitch. Fundraising hadn’t already been wouldn’t eventually be a tricky procedure.
“Sam Altman was the very first person we called to explore the thought … and he wanted to back the group,” Dwivedi explained, noting that Altman didn’t suggest the team go through YC, instead than a desire to feel as though “novices ” again motivated their decision to v three-month program, that is more often made up of budding founders.
Under the hood, ZeroDown includes two businesses conducting concurrently. One is a technology startup supported by the $30 million equity financing and 20 employees. Another is a property fund supported with a “decent amount ” of debt funding (Dwivedi declined to disclose the exact amount). This unique business arrangement helps ZeroDown minimize risk,” he explained.
“It’so meaningful to give folks a place to call their homes, a place where their memories have been founded, a place where they reside,” Dwivedi stated.