The housing market slowdown has not been kind to proptech and fintech firms. Offerpad conducted another round of layoffs this week, adding more numbers to the list of recent cuts made by these firms.
The iBuyer would not specify the number of impacted employees, but at least four Offerpad employees, including a product manager and three software engineers, posted public notices on LinkedIn announcing they had been laid off and were looking for work.
According to an Offerpad spokesperson, more details will be shared during the firm’s fourth-quarter earnings call with investors, scheduled for February 22.
“Recent macroeconomic factors have slowed the trajectory of growth in the real estate industry. Like many others, we are adjusting the size of our operations to align with the current state of the market,” a spokesperson for the firm wrote in an email. “Unfortunately, some of our team members have been impacted.”
The firm noted that it had provided severance packages and extended health care coverage for impacted employees.
Offerpad previously laid off 7% of its workforce in September 2022 after the firm recorded its first three profitable quarters in Q4 2021, Q1 2022, and Q2 2022. However, the firm recorded a net loss of $80.0 million in the third quarter of 2022 as the housing market rapidly cooled.
News of the layoff comes just a few days after Offerpad announced plans to raise $90 million in private placement with existing investors, according to documents filed with the Securities and Exchange Commission. Existing investors involved include CEO Brian Bair, Roberto Sella, and First American Financial Corp.
The $90 million would give the iBuyer an additional six months to a year of operations at its current cash burn rates, according to a note sent to clients by analysts at Keefe, Bruyette & Woods (KBW), led by Ryan Tomasello.
The iBuying business has not been kind to its major players over the past several months, with Opendoor announcing it had laid off roughly 18% of its staff in November and Redfin deciding to shutter its iBuying business a year after Zillow’s infamous iBuying flop.
