Technology

Home ownership has long been touted as the American dream. But rising rates of mortgage debt andstudent loan debt are making the pursuit of home ownership a nightmare. Debt-burdened individuals or those with inconsistent or tight cash flow can not only struggle to get credit loan approval when buying a home but also struggle to satisfy monthly mortgage payments even after purchase.

Patch Homes is hoping to keep the proverbial American dream alive. Patch looks to provide homeowners with cash flow and liquidity by allowing them to monetize their homes without taking on debt, interest or burdensome monthly payments.

Today, Patch took another big step in making its vision a far-reaching reality. The company has announced it has raised a $5 million Series A round led by Union Square Ventures (USV), with participation by from Tribe Capital and previous investors Techstars Ventures, Breega Capital and Greg Schroy.

Patch Home looks to partner with homeowners by investing up to $250,000 (with an average investment of ~$100,000) for an equity stake in the homevalue, generally in the 5% to 20% range. Homeowners aren&t subject to any interest or recurring payments and have 10 years to pay back Patchinvestment. Upon doing so, the only incremental money Patch receives is its portion of the change in the homevalue over the course of the 10-year period. If the value of the home goes down in value, Patch willingly takes a loss on its investment.

According to Patch Homes CEO and co-founder Sahil Gupta, one of the major motivations behind the companymodel is to align Patchincentives with the homeowners&, allowing both parties to think of each other as trusted partners even after financing. After Patchinvestment, the company provides a number of ancillary services to homeowners, such as credit score monitoring, as well as home value and property tax tracking.

In one instance recounted by Gupta in an interview with TechCrunch, Patch even covered three months of an ownermortgage during a liquidity crunch for his small business, allowing him to maintain his home and credit score. Patch is incentivized to provide all services that can help ensure an increase in home value, benefiting both Patch and the homeowner, with the homeowner earning the majority of the assetappreciated value.

Additionally, since Patchmodel isn&t focused on a homeownerability to pay back a loan, interest or periodic payments, Patch is able to provide financing to more people. Patch is able to help those with more variable qualifications that struggle to get traditional loans — such as a 1099 contracted worker — monetize their illiquid assets with less harsh or restrictive terms and without increasing their debt burden. Gupta described this as solving the core problem of providing liquidity to asset-rich but cash-flow sensitive people.

Patch is not only looking to provide easier liquidity to more homeowners, but they&re trying to do so faster than traditional lenders. Interested customers can first receive a free estimate of whether Patch will invest in their home or not, how much itwilling to invest and what percentage equity it will take — primarily based on Patchmachine learning models that focus on asset, market and location-level attributes.

After the initial estimate, a Patch home advisor will educate the customer on the product and start a formal application process, which includes your standard income and credit score verification, which takes 5-10 days. All-in, homeowners have the ability to get money in as little as 14 days, a significantly shorter timeline than your standard home credit process. Once the investment is made, owners have full freedom with how they use the money.

According to Patch, while its customers come from a diverse set of backgrounds, many either with accumulated debt have to pay down the net or may struggle making monthly payments. The average Patch homeowner uses 40% of the investment to eliminate debt, adds 40% to their savings account or passive income and invests 20% into home improvements.

To date, Patch has raised a total of $6 million and believes the latest round of funding will help scale its operations as they team up with advisors like USV that have experience scaling fintech companies (such as a Lending Club or Carta). The funds will be used to invest in product and Patchclearing technology in order to further expedite Patchlending process.

Patch also hopes to use the investment to help them gradually expand their footprint, with the goal of eventually having a presence all 50 states. (Patch is currently available in 11 regional markets within California and Washington and expects to be in 18 regional markets by the end of the year including those in Utah, Colorado and Oregon.)

Image via Patch Homes

What makes home ownership so galvanizing for the Patch team? Patch CEO Sahil Gupta spent years putting his Carnegie Mellon financial engineering degree to work in banking and finance, as well as in financial products and strategy positions at fintech startups backed by heavy hitters such as YC and Goldman Sachs.

After realizing the majority of the U.S. population are homeowners, but were struggling to make monthly payments or save for the future, Sahil wanted to figure out to take an illiquid asset like a home and make it easily accessible.

Around the same time, Sahilco-founder Sundeep Ambati was working as a contractor on a new business venture of his and was struggling to get a home equity loan. While these circumstances ultimately led Sahil and Sundeep to found Patch Homes in 2016 out of the Techstars New York accelerator program, the deeper motivation behind Patch can be traced back nearly 30 years when Sahilfather made an equity-sharing agreement with his brother as they were building his familyhome in India.

With a growing family and a pregnant wife, Sunilfather was adamant about living debt-free, so his brother provided an investment in exchange for an equity stake in the house. According to Sahil, the home is still in the family and has appreciated substantially in value to the benefit of both Sahilfather and his brother. Longer-term, Patch wants to be the preferred partner for home ownership, helping reduce cash-tight owners& financial anxiety without the debilitating weight of debt.

&Some companies want to help people buy or sell homes, but home ownership really begins after that point. Patch is built to be inside the home with you and everything that comes thereafter,& Gupta told TechCrunch.

&Patch was created to partner with homeowners to help them unlock their home equity so they can achieve their financial goals along every step of their home ownership journey.

Google says ittaking new steps to ensure that original reporting gets prioritized in its search results.

In other words, articles that kick off a major news cycle should have a prominent place in search results for a longer time, rather than getting buried under more recent coverage (some of which may just summarize the original story).

&While we typically show the latest and most comprehensive version of a story in news results, we&ve made changes to our products globally to highlight articles that we identify as significant original reporting,& GoogleVice President of News Richard Gingras wrote in a blog post. &Such articles may stay in a highly visible position longer. This prominence allows users to view the original reporting while also looking at more recent articles alongside it.&

But original reporting can be a tricky concept. On the one hand, you&ve got major scoops, and on the other, stories that do no reporting at all. In between, you&ve got stories with real reporting that don&t exactly break major ground. And there are publications (like TechCrunch!) and even individual articles that can combine original reporting with news broken elsewhere.

How can you teach an algorithm to understand all these distinctions? Gingras said Google is doing so through its Quality Raters, a global network of more than 10,000 individuals who offer feedback on Googlesearch results, which in turn is used to improve the companysearch algorithms.

Specifically, Google has changed its guidelines so that articles providing &information that would not otherwise have been known had the article not revealed it& are rated as highly as possible. The guidelines also ask raters to take into account a publicationgeneral reputation (based on &prestigious awards, such as the Pulitzer Prize award, or a history of high quality original reporting&).

Gingras added that we can expect these efforts to &constantly evolve as we work to understand the life cycle of a story.&

This is part of a broader effort at Google to find new ways to work with the news industry, most notably with a $300 million News Initiative announced last year.

Andreessen Horowitz has led a $15 million Series A in US-based job matching platform for nursing vacancies, Incredible Health. Other investors in the funding round include NFX, Obvious Ventures, Precursor Ventures and Gingerbread Capital. To date the recruitment startup has raised a total of $17M.

The California startuppitch to nursing professionals and hospitals is faster and more efficient hiring via proprietary matching algorithms which replace the need for hospitals to manually sift applications. Instead the platform matches job seekers to nursing vacancies based on criteria supplied by both sides of its network.

Why focus on nurses? The startup cites a statistical claim that by 2024 the US will have a shortage of a million nurses — which it argues poses a risk of financial loss to hospitals, as contractors cost more to employ, while also contending that a growing number of unfilled nursing vacancies risks the quality of care hospitals are able to offer patients.

It launched its recruitment platform in late 2017 and has so far limited its range to California, with 150+ hospitals in the region signed up and an undefined &thousands& of nurses on board.

The Series A funding will be going towards accelerating national scaling in the US.

As well as VC backers, Incredible Health Series A includes participation from a number of individual investors hailing from the hiring space — including Hired founder, Matt Mickiewicz; Steve Goodman, founder of Bright.com (acquired by LinkedIn); and Pete Kazanjy, founder of Talentbin (acquired by Monster) .

&We look at at least 40-50 different criteria, including location preferences, licenses and skills,& says co-founder and CEO Iman Abuzeid who has a background as a medical doctor. Her co-founder and CTO, Rome Portlock, who comes from a family of nurses, is an MIT alum — where he studied computer science.

&We work with each hospital individually to understand their key needs so we can customize their algorithms, enabling personalized matches that don&t waste the recruitertime,& Abuzeid adds. &We also find out the nursepreferences through automated methods.

&At the end of the day, a hospital recruiter or hiring executive does not want to see 200 candidates in their app, they want to see 12 that are the right fit. Same with the nurses — they don&t want to hear from 76 employers, they want to hear from three that are the right fit.&

Incredible Healthclaim for its approach is that it yields 3x faster recruitment vs the national average — saying hires via its platform take 30 days or less instead of up to 90 days on average.

It also makes a further claim of 25x &hiring efficiency& for hospitals as a consequence of its matching algorithms taking over much of the hiring admin. This is based on data from hospitals which, prior to using its platform, had to review an average of 500 applicants to fill a single position vs the matching tech cutting that to an average of just 20.

Nurses don&t apply to jobs on Incredible Healthplatform; itup to hospitals to apply to nursing professionals the algorithm deems a suitable match for a job vacancy.

Hospitals can&t browse all available nurses; they only see candidates the algorithm selects for them — so, as with nurses, they&re trading wider visibility of the job market for algorithmic matches based on non-disclosed &proprietary& criteria.

Incredible Health sells that reduction of agency as an efficiency saving to both sides of its network.

&Rather than completing an application for every potential employer — a process which takes an average of 45 minutes per application — nurses who use Incredible Health complete one profile — a process that takes less than 5 minutes. That profile is then used to screen and custom-match them to multiple great job opportunities,& says Abuzeid, adding when asked about criteria that nurses have to provide &data like their job preferences, experience and skill set, and also their education and licensing& as part of the onboarding profile-building process.

For nurses this load-lightening switch from active jobseeker to passive platform lurker — i.e. once they&ve created their profile — is how Incredible Health hopes to woo healthcare workers away from traditional job boards (such as specialist nursing vacancies board Indeed).

Its marketing thus leans heavily on claims that nurses just need to spend a few minutes creating a profile and then watch as the great job offers to roll in.

It also claims nurses who find employment through its two-sided platform score on average a 17% salary increase and a 15% reduction in commute time.

Though all these figures are derived from an unknown number of nurses working across a subset of hospitals in a single US state — so it remains to be seen how claimed perks get squeezed as the platform scales its national range and necessarily opens up to a wider pipeline of nursing professionals.

For now, Incredible Health also says its focus is on building a career marketplace for nursing professionals to connect them with &permanent, well-paid hospital jobs&, rather than dealing with travel and temp nurses.

Again, whether itable to maintain focus on what one investor calls &high value health care workers& and the claimed high quality permanent jobs as the business scales will also be one to watch.

Commenting on the Series A, Andreessen Horowitz managing partner Jeff Jordan told us: &Incredible Healthmission is to help health care professionals live better lives and do their best work. They&ve seen strong early success helping to match these health care professionals with hospitals throughout California, and are beginning to expand their solution nationally. We look forward to supporting their efforts to building a game-changing health care employment marketplace.&

Part of the funding will go on expanding from a pure hiring platform — to what the startup bills as a &community for health care professionals as they advance their careers& — in a clear bid to nurture and expand its candidate pool so it can be responsive to platform needs.

&High caliber nurses are out there, but employers have a hard time hiring them through traditional methods like job boards and recruiting agencies because those methods rely almost exclusively on human engagement — not technology — to scour through applications, licenses and experience — and manually vet and qualify them for jobs,& Abuzeid tells TechCrunch, dubbing the job-board competition &outdated methods&.

As well as offering a &streamlined& hiring process for nursing roles, as she puts it, she notes the platform automates &entire parts of the screening and vetting process& — meaning &we&re able to deliver high-quality nurses at scale&.

That said, therestill manual work involved — with the startup noting on its website that staff may contact nurses to &make sure you&re presenting yourself in the best way possible to top hospitals&, as well as telling hospitals that candidates are pre-screened for &licenses, experience, responsiveness, and more& (though at least some, if not all, of that vetting is automated).

Like any platform startup, Incredible Health is hoping to channel network effects to its advantage — including by feeding data back in to improve matching algorithms.

&Our system gets more effective the more who use it,& Abuzeid tells us. &The first [effect] is a traditional marketplace network effect: More nurses has attracted more hospitals, and more hospitals has attracted more nurses. And then, therethe data network effect: The more each side uses it, the ‘smarter& our algorithms get, too.&

Each hospital onboarded onto the platform brings with it a range of needs &advancing our systemperformance abilities&, she adds.

While algorithmic recruitment can clearly speed up the business of matching candidates to relevant jobs — a factor evident in the sheer number of job matching startups now playing in different sectors — it inevitably entails a loss of control for both sides of the employer-applicant divide.

Depending on matching criteria used there could be potential for gender and/or racial bias to creep into automated selections — bias that would be difficult for hospitals to detect since they&re only able to view a subset of candidates deemed a match, rather than the entire available pool at the time.

However Abuzeid dismisses the idea that thereany risk of bias in Incredible Healthapproach.

&We operate successfully in a very regulated industry,& she says. &Because potential employees are assessed on their skills, experience and certifications, the technology weeds out biases typically found in processes which are largely human-powered.&

On the business model front, Incredible Health is charging hospitals what it bills as a &simple, flat fee pricing regardless of level, experience or location& — which it touts as &cheaper and more scalable than traditional recruiting agencies&.

&Traditional recruiting agencies are very expensive, because they don&t use technology in their screening and matching processes. Itall people powered and can cost $20,000-$30,000 per single hire,& Abuzeid claims.

As for rival (lower fee) legacy job boards, she argues they offer &quantity, not quality and require lots of work for nurses and employers to find a good fit& — claiming this old school method results in &really low hiring rates at 0.2%&.