Wednesday, April 17, 2024

Flyhomes announces 3rd round of layoffs since 2022

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Seattle-based brokerage and mortgage lender Flyhomes announced another round of layoffs on Friday. The company had layoffs in July and November 2022, with one round impacting 20 percent of its workforce.

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After gaining some wind in its sails with the launch of a nationwide partner channel for its buy-before-you-sell solution, Flyhomes is facing another set of challenges.

The Seattle-based real estate brokerage and mortgage lender announced a third round of layoffs on Friday, citing “persistent and worsening industry headwinds” as the reason. The company had two rounds of layoffs in 2022 for similar reasons, with Flyhomes leaders pointing toward “rapidly shifting market conditions.”

“This decision comes in the face of persistent and worsening industry headwinds which have prompted us to restructure our business to best meet the needs of our customers in a rapidly evolving real estate market,” the post read. “Each step we took these past few years was done with thoughtfulness and careful consideration to minimize these types of measures.”

The post continued, “Ultimately though, they simply were not enough, and for that we are sorry.”

The Seattle Times was the first to pick up the news on Monday. At that time, Flyhomes declined to answer questions, including how many employees were laid off or the exact terms of the severance and transitional support packages.

Flyhomes also declined to answer questions from Inman.

“I was [laid off] last year at this time,” former employee Rhonda Elvin commented on Flyhomes’ LinkedIn post. “Still the best company I ever worked for. My condolences to those let go this round.”

Founded in 2016, Flyhomes is a real estate company that offers brokerage and mortgage services. However, they gained most of their notoriety for helping to pioneer the buy-before-you-sell business model, which enables homesellers to purchase a new home with a Flyhomes Mortgage short-term loan while they sell their current property. Once the old property is sold, homesellers can refinance the short-term loan into a conventional, long-term mortgage with Flyhomes Mortgage or another lender.

The company’s all-in-one approach gained attention from individual and institutional investors, such as Zillow co-founder Spencer Rascoff, Andreessen Horowitz, Fifth Wall, Vesta Ventures and Canvas Ventures. Flyhomes raised $310 million across five funding rounds, with the latest funding round drawing $150 million in Series C funding in 2021.

The company used the $150 million funding round to expand its reach in Washington, Oregon, California and Massachusetts, and launch new operations in Texas and Colorado.

However, the dramatic jump in mortgage rates, worsening affordability and souring consumer demand have been especially difficult for Flyhomes and its competitors in the power buying and iBuying space to navigate. Zillow, Redfin and Anywhere shuttered their iBuying businesses, while the remaining players, such as Opendoor and Offerpad, are clawing their way back to profitability.

Flyhomes said it will update consumers on what’s next for the company.

“We will continue to share more details around the proactive steps we are taking to help customers navigate the challenging market, but for now our focus is on those leaving today,” the post read.

Email Marian McPherson

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