Only a few weeks Followed by SPAC IPO, Porch announced today that it had made four acquisitions, totaling $ 122 million. Perhaps the most important acquisition here is US homeowners For $ 100 million, that makes the porch go deeper into the home insurance space. In addition, Porch is also acquiring mower marketing and data platforms V12 For $ 22 million, as well as a home inspection service Palm tech And iRoofing, A SaaS application for roofing contractors. Porch did not disclose the acquisition prices for the latter two companies.
You can still think of the porch as a marketplace for home improvement and repair services – and that’s when it was launched Launched About seven years ago. Yet while it still offers those services, a few years after its 2013 launch, the company Pivoted It is now called the “vertical software platform for the home” for construction. Through several acquisitions, Porch Group now includes Porch.com, as well as Hiraleper, an inspection support network for home inspectors, Kandela to provide services around moving, and insurance brokers in the form of Elite Insurance Group. In one form or another, porch equipment is now used – either directly or indirectly – by two-thirds of US homebuyers each month.
As Porch founder and CEO Matt Erlichman told me, he originally planned to make his company public through a traditional IPO. He said going the increasingly popular SPAC route, however, allowed him to extend his timeline to one year, which now enables the company to make the acquisitions announced today.
“In total, we had $ 323 million in funding, which now allows us to become not only a public company with public currency, but also very well capitalized. And picking that year allows us to be able to go and acquire what we think is really good for the porch, ”Erlichman told me. While Porch’s guidance for its 2021 revenue was previously $ 120 million, it is now updating the guidance to $ 170 million based on these acquisitions. This means that the porch will grow 134% year-over-year between 2020 and 2021.
As the company previously set out in its public documents, the 2021 plan was always to delve deeper into insurance. Indeed, as Erlichman said, Porch these days tends to think of itself as a vertical software company, layer Insurtech on top of its services to be able to create a recurring revenue stream. And because Porch already provides such a wide range of services, the cost of its customer acquisition for these services is essentially zero.
Porch was already a licensed insurance brokerage. Along with US homeowners, it is acquiring a company that is an insurance carrier as well as a general agent.
“We are able to capture all the economic value from the consumer because we help them set up insurance with their new home and we can control that experience to really please them. As we have wrapped all the technology invested around that experience, we can make it super simple and instant to be able to get the right insurance for our new home at the right price. And because we have all this data about the house that no one else has – from inspection we know if the roof is old, we know if the hot water system is going to break soon and all the equipment – we All of this data is known so it gives us a really big advantage in insurance. “
Data is, in fact, much about these acquisitions. Because Porch knows so much about so many customers, it is able to provide it to companies that give it access to relevant data, which in turn helps them provide additional services and make smarter decisions.
US homeowners currently operate in six states (Texas, Arizona, North Carolina, South Carolina, Virginia, and Georgia) and are licensed in 31. It has a network of over 800 agencies and Porch expects the company’s network and geographic expansion in the coming months. “because we have [customer acquisition cost]There is complete demand across the country, one of the opportunities for us is simply to expand across the nation.
For V12, Porch’s focus is on that company’s propositional marketing and data platform. The acquisition will help it reach its medium-term target of creating a $ 200 million revenue stream in the region. The V12 provides services across multiple verticals, including the automotive space, and will continue to do so. The overall focus of the platform is to help brands identify the right time to reach a given consumer – perhaps even before they decide to buy or move a new car. With Porch’s existing data taking the top of V12’s existing capabilities, the company hopes that it will be able to expand these features and that it won’t allow Porch to offer mower marketing but Ehrlichman called the “pro- Mover “services.
“The V12 anchor is what we call our marketing software division. One main focus of that is marketing. This is why it is long-term, coercive discrimination. But there are many other things they are working on that are going to be really good growth vectors, and they will continue to pursue those, ”Erlichman said.
For the two smaller acquisitions of iRoofing and Palm-Tech, these are some of the previous acquisitions that the company has undertaken in the contractor and inspection vertical. Like those previous acquisitions, the plan is to help them develop rapidly through integrating them into the Porch Group’s family of products.
“Our business is very repetitive or recurring in nature,” said The porch CFO Marty Hembigner. “Almost all of our revenue is consistent and predictable with these new acquisitions. This repeat revenue is also high margin with less than 20% of revenue and is expected to grow by over 30% per year on our platform. Therefore, we believe that these deals are highly useful to our shareholders. “