Porch Group (PRCH) acquires Floify

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Porch Group, Inc. (“Porch” or “the Company”) (NASDAQ: PRCH), a leading vertical software and insurance company that is reinventing the home service industry, today announced the acquisition of Floify , a leading provider of automation and point-of-sale software for mortgage companies and loan officers. The acquisition continues Porch’s strategy of providing software to businesses involved in key moments of the home buying process and expands its rapid access to highly motivated home buyers who require key services, including services. insurance, warranty and moving.

Overview of the acquisition of FloifyBased in Boulder, Colorado, Floify helps mortgage companies and loan officers create a better mortgage and refinance experience for their clients. Floify’s digital mortgage automation and point-of-sale software streamline the loan creation process by providing secure application, communication and document portal between mortgage lenders, borrowers, real estate agents and others mortgage industry stakeholders. Loan officers use Floify to collect and verify borrower documentation, track loan progress, communicate with borrowers and real estate agents, and close loans faster. In 2021, Floify helped these loan officers process an average of 77,000 mortgage applications each month.

Strategic rationale

  • History of strong operational and financial performance. Floify has increased its annual recurring revenue (ARR) by 72% CAGR since Q1 2017. With more than 1,500 companies currently using its software, Floify has seen an annual retention of 130% of net revenue in Q2 2021 and its expects $ 15 million in revenue in 2022. Floify is a profitable, rapidly growing company with a growing base of satisfied SMBs and corporate clients. Virtually all of Floify’s revenue is recurring B2B software fees. Floify is expected to operate with margins similar to Porch’s overall business and is expected to generate $ 2 million in revenue for Porch for the remainder of 2021 after closing.
  • Gives Porch Entry into Mortgage Originating Market with Industry-Leading Software: Floify’s flexible solution helps mortgage companies and loan officers provide a streamlined process for borrowers. For Porch, adding relationships with mortgage companies in addition to those with home inspectors, securities companies and moving companies is an important step in making Porch easier to buy and move homes. .
  • Improves Porch’s Early Access to Home Buyers. Floify’s access to borrowers at the start of mortgage application gives Porch an early introduction to highly motivated homebuyers who need other home-related services. About 70% of Floify’s transactions in 2021 came from home purchases. Porch plans to expand Floify offerings to help mortgage companies provide an even better home buying experience for their customers by helping them with additional services for their new home including insurance, home warranty. , moving, TV / Internet, and more. This transactional revenue, added to Floify’s strong and growing SaaS fees, should help Floify to further improve its already strong 10.5x LTV / CAC from the first half of 2021 and thus enable continued investments in profitable growth.

“Floify has an impressive presence and a unique position in the mortgage origination software industry,” said Matt Ehrlichman, Founder, President and CEO of Porch. “There are very few companies providing software for loan officers to help improve the borrower experience, and we are delighted that Porch is now a major player in this industry. We look forward to investing more in helping Floify clients stand out by making the buying and moving process easier for home buyers. With this acquisition, Porch now occupies a leading position in delivering software to most key fragmented home service industries, where companies work with home buyers at key points in the home trip. “

Highlights of transactions Porch acquired Floify for $ 76.5 million in cash and $ 10 million in common shares of Porch at closing (based on the volume weighted average price of our common shares for the five trading days preceding October 26, 2021). Porch assures sellers that the $ 10 million of Porch common stock will double in value by the end of 2024 compared to the Porch stock held by sellers throughout that period. This guarantee will be marked-to-market quarterly through our income statement in accordance with GAAP.

AdvisersManatt, Phelps & Phillips, LLP acted as legal counsel to Porch. AGC Partners served as financial advisor to Floify. Sheppard, Mullin, Richter & Hampton LLP served as legal counsel to Floify.

Conference Call and Webcast InformationPorch management will host a conference call and webinar to discuss this transaction and its business update today, October 27, 2021 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The presentation will be accompanied by a slide show available in the Investor Relations section of the Company’s website. A question-and-answer session will follow the remarks prepared by management.

Everyone is invited to listen to the event by registering for the webinar here.

To access the webinar by phone, please see below:

One Mobile Tap: US: + 16699006833,, 88491454515 # or + 14086380968,, 88491454515 #

Or join by phone: Dial (for best quality, dial a number based on your current location):

United States: +1 669 900 6833 or +1 408 638 0968 or +1 346 248 7799 or +1 253 215 8782 or +1 301 715 8592 or +1 312 626 6799 or +1 646 876 9923

Webinar number: 884 9145 4515

International numbers available here

If you are having difficulty connecting to the conference call or webcast, please contact the Porch Investor Relations team at (949) 574-3860 or [email protected].

A replay of the webinar will also be available in the Investors section from Porch’s corporate website.

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