{"id":3281,"date":"2022-06-28T23:13:38","date_gmt":"2022-06-28T23:13:38","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/06\/28\/sundae-lays-off-15-of-employees\/"},"modified":"2025-03-13T02:44:31","modified_gmt":"2025-03-13T02:44:31","slug":"sundae-lays-off-15-of-employees","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/06\/28\/sundae-lays-off-15-of-employees\/","title":{"rendered":"Sundae lays off 15% of employees"},"content":{"rendered":"\n<p>In just three years of existence, San Francisco-based company <strong>Sundae<\/strong> execs have reported raising at least $135 million in venture capital and expansion into <a href=\"https:\/\/marketplace.sundae.com\/\">20 markets across the country<\/a>. Co-founded by former executives at residential bridge lender <strong>LendingHome<\/strong>, Sundae taps into homesellers <a href=\"https:\/\/preprod.housingwire.com\/articles\/the-100-years-war-over-real-estate-commissions\/\">discontented by real estate agent fees<\/a> as well as the growing pool of home investors.<\/p>\n\n\n\n<p>But the fast-growing business hit a snag last week, announcing layoffs to 15% of its workforce.<\/p>\n\n\n\n<p>\u201cIn order to protect our future and ensure Sundae is around for decades to come, we made some tough but important decisions,\u201d Josh Stech, CEO of Sundae stated. \u201cThese decisions impacted 15% of our team members, primarily in our youngest markets.\u201d<\/p>\n\n\n\n<p>A spokesperson for Stech did not answer a question regarding the number of employees Sundae had. However, a TechCrunch article <a href=\"https:\/\/techcrunch.com\/2021\/07\/20\/sundae-closes-on-80m-for-residential-real-estate-marketplace\/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAB4638GkOv6y5RVYXScLLGCtn2lCsinujJ19Ru_VABMJ1p3dLlmxX6TrTv9uCZYcK9QXHYVUEswz_pWHyK6VIdgGqrDmMhmdFrsgVY0w2CIgXlK9WAVIvo6zkEQC2r6rDZGDhwWjXzfckRHxKPdiIgVyHvsPAEX3foh1za2KKsp9\">from last July<\/a> pegged Sundae\u2019s headcount at \u201c180 mostly remote employees.\u201d<\/p>\n\n\n\n<p>But the TechCrunch story also reported the company is \u201cclosing in\u201d on an $80 million round of fundraising, which would result in new hires. As of last July, Sundae operated in 14 markets. Today the company is in 20 locales, including three new operations in South Carolina and additional offices in California.<\/p>\n\n\n\n<p>One employee who had been laid off and spoke on the condition of anonymity said she had received assurances no layoffs would take place. However, she said, company circumstances quickly changed.<\/p>\n\n\n\n<p>\u201cI received a <strong>Zoom<\/strong> seminar invite on the morning of June 16,\u201d she said. \u201cI couldn\u2019t see who was invited, so I assumed it was a layoff announcement.\u201d<\/p>\n\n\n\n<p>Her assumption was confirmed once her <strong>Slack <\/strong>messaging platform became deactivated.<\/p>\n\n\n\n<p>\u201cI was surprised and not surprised at the same time,\u201d she said of the layoffs, noting the company had acknowledged \u201cslower than expected growth\u201d in the third and fourth quarters of 2021.<\/p>\n\n\n\n<p>Stech described the pink slipped employees as, \u201cWonderful people we would have loved to keep under different circumstances. We did our best to communicate these changes in a way that aligned with our values of empathy and transparency.\u201d&nbsp;<\/p>\n\n\n\n<p>For the areas in which it operates, Sundae is a matchmaker between home seller and home investor.<\/p>\n\n\n\n<p>\u201cSundae&#8217;s marketplace helps homeowners sell their property in as-is condition, quickly and for the best price,\u201d Stech explained.\u00a0<\/p>\n\n\n\n<p>Under the business model, a homeowner reaches out to Sundae to sell their home for cash. Representatives at Sundae conduct an in-person home inspection and evaluate the cost of any repairs or refurbishment. Then, with a valuation and repair number, Sundae kicks the home over to a pool of registered investors who bid for it.\u00a0<\/p>\n\n\n\n<p>For the seller, the stated appeal of such a model is that Sundae \u2013 unlike a real estate agent or an <a href=\"https:\/\/preprod.housingwire.com\/articles\/a-zillow-problem-or-an-ibuying-problem\/\">iBuying company<\/a> \u2013 does not charge a 5-6% fee off the sale price. Sundae, instead, makes its money from fees investors pay. Also, like an iBuyer, the seller is able to quickly exit their abode.<\/p>\n\n\n\n<p>As for investors, Sundae provides a pipeline of possible asset purchases. About 18% of all homebuyers in the fourth quarter of 2021 were investors, <a href=\"https:\/\/www.redfin.com\/news\/investor-home-purchases-q4-2021\/\">according<\/a> to <strong>Redfin<\/strong>, with an investor defined as any institution or business who does not plan to use the house as a primary residence.<\/p>\n\n\n\n<p>However, in practice, the former employee said, the arrangement doesn&#8217;t always work. <\/p>\n\n\n\n<p>\u201cA lot of times they were struggling to convert the homeowner because the offers they would get would be rather low compared to what the homeowner felt the home was worth,\u201d she said.<\/p>\n\n\n\n<p>Sometimes the potential seller would then ditch Sundae, the former employee claimed, and take their business to an iBuyer like <strong>Opendoor<\/strong>.<\/p>\n\n\n\n<p>Stech co-founded the company with Andrew Swain, now Sundae\u2019s chief financial officer, the same position he held at <strong>LendingHome<\/strong>, an online mortgage bank specializing in short-term bridge loans.<\/p>\n\n\n\n<p><em>Connie Kim contributed reporting<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sundae, a three-year-old matchmaker between home seller and investors, laid off about 15% of its employees.<\/p>\n","protected":false},"author":16592,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[736],"class_list":["post-3281","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - 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