Summary

True Footage is a residential appraisal company founded in 2019 and launched in 2021. Their core business is a tech-enabled appraisal company for both in-person and desktop appraisals. They also have a software platform that improves the efficiency and objectivity of the appraisal process. Currently, True Footage is operating in 32 states providing appraisals for over 300 banks and appraisal management companies as customers.

Background

The appraisal industry remains one of the most manual steps in the residential homeownership cycle. During COVID, a labor shortage in the appraisal industry as well as surging refinance demand led to extended turn times and low quality customer service. Even as the market has cooled, millions of appraisals are needed every year for both mortgage providers and non-lender valuations (divorce, estate, property tax challenges, etc.) and appraisers are looking to join a platform with more services and benefits. The failures of the industry during COVID created an opening for new market participants to capture market share. True Footage is leading the appraisal modernization movement with its appraiser platform and software products.

Why Cashmere Fund Invested:

Evidence of Product-Market Fit:

True footage has over 15x’d their annualized revenue in the past year even with interest rates rising. This has shown that their current offering is resonating with both lenders and appraisers. For lenders, True Footage appraisers offer an average turnaround of 6 days (industry average is 15), reducing snags in closing new loans (27% percent of delayed home transactions had appraisal issues). True Footage appraisers use the appraisal software to draw on real market data for their adjustments (reducing guesswork and risk) and can complete up to 5x the number of appraisals they can do on their own (making more money).

The Industry is Ripe for Innovation:

The industry is historically sole proprietors (76% of the market) that rely heavily on Appraisal Management Companies (AMCs) to source work. In addition, more than half of appraisers are over age 60, putting pressure on methods to more efficiently conduct appraisals as these appraisers retire. Regulatory changes as well as new product lines from lenders created demand for new types of appraisal companies with faster turnaround times and better service. True Footage is capturing that demand and is already the largest appraisal company in the US with still many large markets remaining to open up.

Strong Founder-Market Fit:

John Liss has been passionate about real estate his entire life. He first earned his realtor license at age 18 and later conducted his thesis on real estate and brokerages while attending Harvard College and then Harvard Business School. His prior work experience is in the financial markets, primarily in the real estate vertical.