The Royal Bank of Canada (RBC) has acquired the Canadian operations of United States-based proptech company and former partner Ojo Holdings to help its customers navigate the home-buying process.
As part of the deal, Ojo’s Canadian division, Ojo Canada, will become an RBC-owned company, adding to RBC’s portfolio of existing proptech ventures through RBCx.
Headquartered in Austin, Texas, Ojo provides an end-to-end platform for buying and selling homes that enables users to search for homes and access a network of industry experts.
“Now more than ever, consumers need a trusted ally to guide them through the home buying and selling journey.”
– Karen Starns, Ojo Canada
Ojo’s Canadian division, Ojo Canada, joins a suite of RBC offerings ranging from personal lending products and residential mortgages, to digital homebuyer tools like a mortgage payment calculator, and a neighbourhood search engine for homes, among others.
Head of RBCx Sid Paquette described Ojo Canada as “a comprehensive one-stop hub for Canadian home buyers who are looking for a simpler, integrated experience in this fragmented market,” noting that the financial institution plans to build on Ojo Canada’s capabilities.
RBCx was created to provide banking services and products to tech companies, including a venture debt offering it launched in 2021, while RBC Ventures built, partnered with, acquired, and made investments into technology platforms.
RBC consolidated RBCx and RBC Ventures under the RBCx brand in 2022. RBCx’s portfolio comprises companies that largely operate in the proptech and financial services spaces. This includes real estate tech startups MoveSnap, Smart Reno, and Garbage Day, as well Dr. Bill, which provides billing solutions for doctor’s offices.
In 2018, RBC entered a partnership with Ojo to test product innovations in the Canadian market. RBC expanded that collaboration in 2021 to pilot launch a Canadian real estate portal called Ojo Canada. In the less than two years since its launch, RBC claims that Ojo Canada has seen “consistent growth in the Canadian market.”
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RBC told BetaKit that Ojo Canada will operate independently from Austin-based Ojo Holdings as a standalone Canadian business, and that Ojo Canada will now be part of the RBCx portfolio, led by Ojo Canada CEO Karen Starns. Starns was previously the chief marketing and communications officer at Ojo in the US.
Concurrent to the sale of Ojo’s Canadian operations to RBC, as Business Insider first reported and BetaKit has confirmed, Ojo also received debt financing from the credit arm of Vista Equity Partners. A spokesperson for Ojo told BetaKit that the funding from Vista, combined with the price tag of Ojo Canada’s acquisition, amounted to $200 million USD total, but declined to disclose the exact breakdown.
In a statement shared with BetaKit, a spokesperson for Ojo said that the capital from Vista “puts Ojo in a cash strong position and will allow us to continue to strengthen the fundamentals of our business, while exploring new opportunities for growth.”
Proptech startups like Ojo can benefit from additional liquidity as the housing market enters a cooling down period.
The acquisition comes as reports have shown that Canada’s housing prices have continued to fall as mortgage rates have increased alongside interest rates. These factors, coupled with rising inflation and the volatile conditions in the overall tech sector, have led to difficult conditions for homebuyers and proptech startups alike, from Properly to Opendoor.
By joining RBC, Ojo Canada aims to accelerate its efforts to help more Canadians “fulfill their home ownership ambitions” amid challenging economic conditions. “Now more than ever, consumers need a trusted ally to guide them through the home buying and selling journey,” said Starns. “We see ourselves as that ally.”