Well, perhaps this headline is a little misleading. We’re sure the actual Welcome Wagon went digital a long time ago. You may remember, print Yellow Pages companies used to bundle a slew of offers for new movers. Virtually every publisher had its own spin on the packaging. And different providers were bundled up in those offers. But it was a substantial piece of business back in the day.
So it was with interest (and a bit of nostalgia) that we read about the combination of PropTech Acquisition Corporation and Porch.com into a single, publicly-traded company that in many ways emulates the old Welcome Wagon.
From Leads to “Home Transition”
It seems like just a few years ago (it was actually seven years ago) when Porch sprang to life and began competing in the home services lead generation space against the likes of HomeAdvisor and Angie’s List.
In fact, I remember listening to their CMO at a BIAKelsey event in San Francisco five years ago wondering how they would differentiate themselves in an already crowded space.
I guess they did too. In reading about Porch.com’s evolution, I learned that they flipped their model from lead gen and became a vertical SaaS company focused on the home “transition” market.
The New Welcome Wagon
What is the home “transition” market? It is the amalgamation of companies that facilitate the moving process. In other words, the Welcome Wagon. Movers, home inspection companies, large utility companies, real estate professionals, and so on.
Today, some 8,000 of these businesses, according to Porch.com’s website, are on the platform to help those businesses deliver a better customer experience. The company says it’s that each month it touches two-thirds of all home buying experiences.
We wonder how they arrive at this number with just 8,000 companies using the software. We assume it derives from the fact they have large utility operators as part of their ecosystem. This would allow them to claim that kind of coverage.
According to PitchBook, Porch.com had raised nearly $120 million since its founding in 2013. There is a very transparent timeline of the company here on its website.
Here are some major milestones that stick out include its 2014 deal with Lowes Home Improvement stores and the launch of its moving concierge service to keep track of all the details surrounding a move. Also, the 2019 intention to enter the insurance leads business.
Now, according to the website, the company can offer a variety of services and solutions to the customer in-home “transition” including:
- Compare and buy home and auto insurance policies with competitive rates and the right coverage
- Have their entire move coordinated, whether labor to load or unload a truck, or full-service long-distance
- Discover and install the best home automation and security systems on the market
- Compare internet and TV options for the new home
- Book small handyman jobs at fixed, upfront prices with guaranteed quality
- Compare bids from pros who can complete bigger jobs
The press release says the deal results in an “estimated post-transaction enterprise value of $523 million, with up to an additional $205 million in net cash to fund growth.”
So far, we know little about the acquiring company PropTech Acquisition Corporation. Apparently, it was created to roll-up companies in the home services space.
The press release describes PropTech Acquisition Corporation in the following way.
“PropTech Acquisition Corporation is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.”
What’s on PropTech’s Shopping List?
So this description makes us wonder what acquisition targets they have on the chalkboard. For quite a while we’ve been expecting a consolidation of many of the smallish players in the home services SaaS space.
Some obvious acquisition targets would include companies providing CRM solutions to the local space. Others might include reputation management, customer experience, and communications companies. Think SignPost, BirdEye, or Broadly.
When we dug a bit further into PropTech’s ownership, we learned its principal spent several years in large-scale real estate investment.
We’re guessing that Thomas Hennessy, the co-CEO of ProTech Acquisition Corporation will be leading the acquisitions effort. Porch founder and CEO Matthew Ehrlichman will likely handle operations. It should be interesting to see what the two can do with Hennessy operating from Wilson, Wyoming.