The home services company Porch.com, which runs a platform for users to find and book home improvement services, has announced that it is to go public via a special purpose acquisition company (SPAC). The deal will see the company effectively merge with LA-based PropTech Acquisition Corp before launching on the market with a valuation of $523 million.
The company generates its revenue by selling software to moving and insurance companies as well as by providing a marketplace for users to find home improvement services. The business has seen rapid growth over the last few years and generated $57 million in revenue for 2019 with $73 million projected for 2020. Despite the revenue growth, the company is still not operating a profitable business and will be hoping that the IPO will bring in the capital to scale the product and reach that milestone.
The novel SPAC approach to the IPO has been rumored for some time to be the way that PropTech companies will look to bring their firms to the public market in the future. Before having its valuation slashed at the onset of the global pandemic, Airbnb was looking at going public via an SPAC and the commercial real estate marketing company, which recently launched its hotly anticipated portal, was reportedly approached by a SPAC to go public recently as well. Porch.com’s existing VC investors, including Valor Equity Partners, Lowe’s Cos., Founders Fund and Battery Ventures, will be paid out $30 million on the IPO.