Proptech startup Roofstock has laid off one in five employees six months after its value hit $1.9 billion.
The Oakland-based company, an online platform to invest in single-family rental homes, will lay off 20 percent of its workforce in response to conditions in the real estate market, SFGate reported.
The unicorn company admitted to laying off workers, but didn’t say if they would receive severance pay or health care benefits or how many employees were given marching orders. Nationwide, typical home prices fell 2 percent from May to August, according to Zilllow.
“Like many, we have been closely monitoring the economic environment and are making appropriate adjustments to be responsive to current market conditions,” a spokesperson told SFGate. “As a result, we made the difficult decision to let go of approximately 20 percent of our workforce.”
The news came days after the company announced it had sold its first single-family home using NFTs, or non-fungible tokens.
Roofstock allows “remote real estate investing,” which lets investors buy single-family properties in smaller, less expensive areas to rent out.
The business model is controversial, as investors that buy up homes to rent them out drive up the cost of housing, making them less accessible to suburban families. A quarter of homes sold in the U.S. last year were bought by investors, according to a Stateline report.
Founded in 2015 by Gary Beasley, Gregor Watson, Devin Wade and Rich Ford, the Roofstock platform allows individual investors to buy and sell homes with tenants, with the company providing metrics such as yield, annual return and home price appreciation.
Roofstock takes a 3 percent cut of the transaction price from sellers and a 0.5 percent fee from buyers. Investors can also buy fractions of homes to spread risk.
]The proptech startup, headquartered in a green Art Deco landmark originally built for retailer I Magnin, raised $240 million in March, at a $1.94 billion total valuation.
Beasley, Roofstock’s CEO, disputes criticism that his company has commodified the single-family home, pricing out the American Dream for the benefit of investors.
“We’re creating more liquidity and transparency and bringing down costs, which ultimately benefits investors of all sizes,” Beasley told The Real Deal in April.
The company has recently entered the NFT game. This month, it sold a home in Columbia, South Carolina, on the blockchain — the first sale “with onchain financing” using U.S. currency and not a cryptocurrency.
— Dana Bartholomew