Roofstock cuts 27% of staff, five months after 20%, a year after a $1.9B valuation

An Oakland marketplace for buying and selling leased single-family rental homes in dozens of US markets.

That deeper cuts now give Roofstock enough runway to outlast the downturn in housing and real estate tech.

Over $365M raised since 2015, including $240M in March 2022.

Roofstock lets institutional and retail investors buy and sell leased rental homes without displacing renters. In March 2022 it raised $240M at a $1.9B valuation led by SoftBank Vision Fund 2 with Khosla Ventures, Lightspeed and Bain Capital Ventures, having facilitated over $5B in transactions, more than half in the prior year.

Rising mortgage rates and a housing slowdown hit proptech in 2022. Roofstock cut 20% of staff, then about five months later 27%. CEO Gary Beasley's email said the cut was a response to the challenging macro environment and its negative effect on the business, that the company had not expected to cut again so soon, and that it needed to right-size to reduce cash burn and keep runway until the market turns.

Beasley blamed a challenging macro environment and its negative impact on Roofstock's business.

Rising mortgage rates and a slowing housing market squeezed real estate technology companies.

The company wanted to reduce its cash burn rate.

It needed adequate capital runway until the market eventually turns.

A valuation set in a hot market can leave a startup cutting twice within months once rates move; the second cut shows the first was too small.

As of 2023-03-22 Roofstock had cut about 27% of staff in a second round of layoffs; the company had not commented to TechCrunch and the exact headcount was unconfirmed.