Porch Leverages IPO To Bring Digital Technology To Homebuying

Relocating one’s living quarters can be a great life event (new house) or a devastating one (foreclosure). During the pandemic, Pew Research Center found that 22 percent of all Americans either moved or know someone who did as a result of it. The most popular response among the Pew respondents was to reduce exposure to the pandemic; 18 percent had to move for financial reasons.

The dynamics behind moving, and the customer experience associated with it, are complex and usually stressful. It has been the driving factor behind the business model at Porch, which bills itself as a “concierge service for homebuyers.” In fact, as Porch founder, Chairman and CEO Matt Ehrlichman told PYMNTS in a recent conversation, when consumers rank the top most stressful life events moving comes in third.

“Statistically it only falls behind the death of a family member or getting a divorce. And to us, that’s just crazy. That despite it being such an important time, such an exciting time, it is also stressful,” Ehrlichman said.

It’s also, he said, where Porch finds opportunity. Because the process of moving doesn’t have to be this way.  The goal is to make it possible for every consumer to experience moving that “feels like it does to a CEO with a white glove, corporate relocation, where everything’s just handled for you.”

And, he said, Porch starts the journey into 2021 more ready than ever to build those white glove moving experiences accessible to the masses than it has ever been.  The firm completed its SPAC- IPO in late December and saw its valuation climb to north of $1 billion. That was followed in mid-January by a slate of acquisitions that branched out its services offering in InsurTech, moving, roofing and home inspections.

What all of this does, Ehrlichman said, is put Porch on a solid footing to be “aggressive” as it takes on the market in 2021.

“We built out this platform to try to make the home simple and help all the home services companies that are working across the home run better businesses at the end of the day,” Ehrlichman explained.

Serving Servers And Consumers

The Porch model is a little bit different than others in the market also working to disrupt this rather broken segment.  Part of its business, he explained, is purely B2B. It provides software to firms like home inspection companies and other service providers in the segment and collects SaaS fees from them. That relationship with the firm offers an advantage in building the consumer-facing side of the business with an earlier and natural entry point with those customers.

“We meet the consumer, so much earlier because we’re introduced by these trusted companies like the home inspection company. From there we’re then able to help those consumers as they go through that move before they go to Google,” Ehrlichman said.

Because Google, he said, is where these consumers are ending up, trying to corral a series of services they need all at once without much more than online reviews to act as their guide to quality. That resort to “Google roulette” is a large part of why moving is so stressful for so many. Porch, he claims, offers them an option for a trusted, curated, one-stop-shop to get those services set up with confidence.

“At its core, Porch is a vertical software company and we provide software to around 11,000 companies to help them run their business,” Ehrlichman said. “We’re the largest provider of software in the home inspection industry, 28 percent of all the home inspections in the U.S. are managed through our software system. And we provide software to moving companies, roofing contractors, a number of other verticals.”

The Road Ahead

Real estate, like most verticals, had a bumpy ride in 2020. Porch saw a lot of these smaller partners closing up shop and “hunkering down” in the first half of the year when the market drastically slowed down and things looked very uncertain.

The market, however, bounced back, and Ehrlichman said, real estate ultimately ended up much less hard-hit than other segments — as the pandemic did more to accelerate interest in the market than depress it overall. As such, he said, Porch enters 2021 confident about what comes next — a fact underlined that Porch has upgraded its revenue forecast for the year to $170 billion, which is 134 percent year-on-year growth.

Their expectations are big, he said, because the market is big. The segment Porch plays in, he said, is worth $320 billion annually, and growing.

“The reality is we’ve just barely scratched the surface; we do feel like we’re just getting started,” he said. “Now a public company it’s going to be a ton of fun to be able to continue to pull these levers, and scale it up and provide software that really transforms these companies. And through those companies, connect to consumers to  help make their moves and home projects simple at the end of the day.”