Property Tech Startup Knock Hires Goldman Sachs to Go Public
(Bloomberg) -- Knock has hired Goldman Sachs Group Inc. to advise on a bid to go public, as the property technology startup seeks cash to rewrite the playbook for buying a home.
Knock is considering a plan to raise $400 million to $500 million through an initial public offering, according to people familiar with the matter. It is also weighing a merger with a special purpose acquisition company or direct listing, they said.
The company expects to be valued at roughly $2 billion, according to one of the people, who asked not to be named because the matter is private.
Knock Chief Executive Officer Sean Black confirmed in an interview that his company had hired Goldman to advise on its effort to go public. He declined to comment on the company’s valuation.
“We think we are at the beginning of a tectonic shift,” said Black. “Our priority is to raise a war chest on the theory that whoever raises the war chest wins the war.”
A representative for Goldman Sachs declined to comment.
Black was part of the executive team that took the home-listing company Trulia public during an earlier wave of housing startups. He started Knock in 2015 with co-founder Jamie Glenn and it now operates in roughly 30 U.S. markets.
The company, which previously raised $600 million in equity and debt, calls its main offering the Knock Home Swap. It lends customers money to buy a new home while helping them sell their old one. The model is designed to help buyers make no-contingency offers that give them a leg up in competitive markets, according to Knock’s website.
Going public would help Knock compete with a range of deep-pocketed companies seeking to make housing market transactions more consumer friendly. That includes Opendoor Technologies Inc.; Offerpad, which has agreed to go public through a SPAC merger; and Compass Inc., which has filed documents for an initial public offering.
These companies have benefited from a hot housing market during the Covid-19 pandemic, as low interest rates, tight inventory and the desire for bigger living spaces have stoked home sales across the U.S.
©2021 Bloomberg L.P.