In a funding round led by NFX Ventures' Pete Flint, California-based real estate startup Radius will use the $13M to kick off a nationwide expansion and begin developing a mortgage product.
California-based real estate startup Radius has raised $13 million in Series A funding, according to an announcement on Wednesday.
Trulia co-founder Pete Flint’s NFX Ventures led the funding round alongside Los Angeles’ largest seed-stage venture capital firm, Crosscut. The $13 million will be used to fuel a nationwide expansion and to continue growing its executive team.
Radius co-founders Biju Ashokan and Sanya Gurnani.
“We’re building a real estate company that empowers entrepreneurial agents to build the business of their dreams,” Radius co-founder Biju Ashokan said in a statement. “Agents shouldn’t have to choose between giving up their commissions and getting support from their brokerage. “With [former Flyhomes executive] Sam [Kasle’s] experience scaling companies, [former Coldwell Banker Bain executive] Barbara [Hindle’s] experience building great real estate brands, and the support of our agents and investors, we’re thrilled to expand Radius to real estate professionals around the country,” he added.
Radius’ journey to full-fledged real estate brokerage has been six years in the making, with the startup launching as agent-focused social media and referral network Agentdesks. In 2018, the startup changed its name to Radius and garnered the attention of Flint, who was impressed by Ashokan and co-founder Sanya Gurnani’s ability to build a then-70,000 agent-strong platform without paid advertising. “It’s not something I’d seen have any level of traction,” Flint told Inman of Radius in 2018. “Within Trulia and Zillow there are community forums for agent-to-agent communication, but that’s a desktop orientation. The real estate industry is fundamentally one of ‘coopetition’ — everyone cooperates with each other, and everyone competes with each other.”
He added, “It’s fundamentally an enormous market. The way that business is done today, it’s done in a very analog, offline way. This is a way to professionalize it and make it more efficient.”
Since then, Radius has gone headfirst into real estate brokerage operations with agents in California, Colorado, Texas, and Georgia. Dubbed Radius Agent Realty, the virtual brokerage operates with a 100 percent commission model with two flat-fee options of $100 per month for basic support and $250 per month for access to Radius’ entire professional suite. Agents also pay coordination fees for buy-side ($900), sell-side ($1,050) and dual ($1,35) transactions along with $600 for E&O Insurance.
Radius agents receive marketing, technology and training, legal compliance, lead generation, transaction coordination, and branding support, along with access to a team of success managers, marketers, designers, managing brokers, mentors, and coaches.
Alongside Radius Agent Realty, Radius also offers a Side-esque option for team leaders that enables them to maintain their branding while Radius handles their backend operations, including scouting and vetting new team members. Team leaders pay $350 per month and also follow the transaction and insurance fee structure for individual agents, However, they’re able to charge their team members an override.
“A flat-fee structure is very important because it doesn’t matter what the property value is — it could be $200,000, $5 million or $10 million — the support the brokerage provides is going to be the same,” Ashokan told Inman. “It doesn’t need to be a commission split, it should be a flat fee. That’s typically how every business charges people, so even real estate should do that.” Lastly, Radius offers its flagship lead concierge service, Radius Assist, and has entered into the world of power buying with its own buy-before-you-sell and pre-sale home prep financing options.
With its buy-before-you-sell option, Radius will purchase sellers’ properties with an initial payment of up to 75 percent of the current value of the home, which enables them to pay off any mortgages. From there, Radius makes minor upgrades to the home, relists it on the open markets and gives sellers the upside.
“Whether it’s lead nurturing, financial products like buy-before-you-sell, or concierge teams, there’s a lot of support they need to succeed,” Akoshan said of Radius’ expanding services. “What we’re trying to sell here is a real estate company that empowers entrepreneurial agents because agents are all founders and entrepreneurs. They don’t have to do it alone.”
So far, Radius has yielded solid results from its push into real estate sales. In the first quarter of 2022, Radius agents and teams closed more than $400 million in sales — representing 213 percent quarter-over-quarter and 300 percent year-over-year growth. Radius’ referral network has also generated $25 billion in referral commissions since 2019.
“Radius’ dedication to building great technology and great real estate agents sets them apart,” Flint said of Radius’ progress since becoming a lead investor in 2018. “Their access to an established network of agents across the country, paired with their integrated technology platform and quality coaching will help established agents and the next generation of real estate entrepreneurs alike.”
Crosscut Ventures Managing Director Brett Brewer said he’s also excited to help fuel Radius’ next stage of growth, as they launch sales operations in Washington, Florida, and Oregon and begin the process of building a Radius mortgage product.
“In Radius, we see a chance to be part of building the next wave of great real estate talent and technology,” Brewer said. “We’re excited to see Biju and the team scale their holistic technology, coaching, marketing, and real estate community to agents nationwide.”
Article Originally Published: 4/27/22-Inman News