California-based Startup Splitero Funds Series A Round

San Diego, California-based home equity investment (AMI) startup Splitero has raised approximately $12 million in Series A funding to expand its operations.

Fiat Ventures led $11.7 million, the two parties announced on Tuesday. Gemini Ventures, Joint Effects, PBJ Capital, Permit Ventures, Dream Ventures, Goodwater Capital, Spark Growth Ventures, and Oyster Fund participated in the round.

According to Michael Gifford, CEO of Splitero, the company has raised capital in a “tremendous growth environment” despite a challenging economic environment. 

The startup previously operated in California, Colorado, and Washington state, but has also announced expansion into Oregon and Utah.

Splitero’s business model involves offering up to $500,000 in one-time cash to homeowners with no income or credit score requirements or monthly payments. In turn, customers share their appreciation for the house with the startup. The client must keep at least 20% of the equity in the home. 

Homeowners have the option to buy back their home share from Splitero at any time during the 30-year term by refinancing, selling the home, or buying with cash. 

Splitero, founded in 2021 by real estate veterans, says it has provided more than $1 billion in equity to homeowners. 

Fiat Ventures General Partner Alex Harris said in a statement that homeowners’ financial needs are constantly changing, creating a need for unique and flexible solutions to help them achieve their goals and achieve financial health.

Home equity products have become more popular as US home prices have risen. According to Black Knight, homeowners will have $11.5 trillion in liquid assets in the second quarter of 2022, $5 trillion above pre-pandemic levels. 

Available equity is the amount a homeowner can borrow if they own 20% of the equity in their home.

Many mortgage lenders invest in a home equity line of credit (HELOC) products, such as Homepoint, Guaranteed Rate, United Wholesale Mortgage, and loanDepot.