Proptech and fintech firms have not been spared by the slowdown in the housing market. Offerpad added another round to its list of recent layoffs this week.
Although the iBuyer did not provide details about the number of affected employees, at least four Offerpad employees, including a product manger and three software engineers posted notices on LinkedIn announcing that they were being laid off and were seeking work.
A spokesperson for Offerpad said that more information will be shared with investors during the fourth-quarter earnings conference, which is scheduled for February 22.
“Recent macroeconomic factors have slowed growth in the realty industry. We are adapting the size of our operations to match the current market state, as many others have done,” a spokesperson for the firm said in an email. “Unfortunately, some members of our team have been affected.”
The firm stated that it had provided severance packages as well as extended health care coverage to employees who were impacted.
After the firm’s first three profitable quarters in Q4-2021, Q1-2022, and Q2-2022, Offerpad had previously laid off 7% its workforce in September 2022. The firm suffered a net loss in the third quarter 2022, as the housing market slowed down.
According to documents filed with Securities and Exchange Commission, the news of the layoff comes only a few days following Offerpad’s announcement that it would raise $90 million through private placement with existing investors. Roberto Sella and CEO Brian Bair are among the existing investors.
According to a note sent by Keefe Bruyette & Woods (KBW) to clients, the $90 million would allow the iBuyer to continue operations at its current cash burn rate.
Over the past few months, the iBuying business has been hard on its major players. Opendoor announced that it had laid off approximately 18% of its staff in Nov. Redfin decided to close its iBuying company a year after Zillow’s infamous iBuying flop.