After seven years of hard work, a change in business model and more than $120 million in funding, Porch announced last July that it was ready to go public.
The company started life in 2013 as a home services marketplace. As it scaled toward the limits of that business model, Porch revamped its product offering and reemerged in 2018 as an enterprise software provider for home service companies, supporting home inspections, real estate sales, insurance and moving operations. More than 11,000 companies now use its technology, while users still visit Porch as a one-stop shop for all home improvement or moving-related services.
In last year’s announcement, Porch said it would reach public markets through a special purpose acquisition company, or SPAC, by merging with PropTech Acquisition Corporation, a public company created specifically to acquire businesses providing “technological innovation to the real estate industry.”
“Merging with PropTech and becoming a public company is the right next step in our growth phase and a key milestone for our company,” Porch co-founder and CEO Matt Ehrlichman said in a statement at the time. “A public listing will enhance our ability to scale more quickly and continue to innovate.”
SPACs became popular last year, partly as a reaction to increased market volatility associated with the pandemic. They create a faster avenue for companies to reach public markets than the traditionally grueling six-month process of registering an initial public offering with the SEC.
“For us, it’s a really good match because it accelerates our path to take this company public by a good year,” Ehrlichman told GeekWire last July. “It gets us public faster, gets us really well-capitalized. It’s an exciting opportunity for both companies.”
While the mechanics of SPACs have been widely covered, we’re more interested in what this kind of corporate maneuver means for employees within an organization. How does the organizational structure and nature of a company’s work change — or not — once it has arrived on the public markets?
Five months on from Porch’s debut on the Nasdaq — and with four new acquisitions under its belt — we checked in with Ehrlichman to learn what has changed and what has stayed the same at the Seattle company.
What were some of Porch’s key differentiators from the competition during your period as a private company?
We focused on creating a feature-rich vertical software platform with a unique pricing model that allows us to monetize with SaaS and transactions — increasing our total addressable market by serving both home service companies and the consumer. We are a software-first company providing tools to a broad spectrum of home service organizations which provide us introductions to their customers to help with the move as well as unique property data. This access to consumers and data is unique to our model and serves as a competitive moat — we have access to homeowners early in their moving process and can provide personalized offerings based on their data such as home insurance and more through their lifecycle of homeownership.
What are the biggest challenges your team has faced since you went public?
We chose a SPAC IPO because we felt it offered advantages of speed and access to capital immediately. As the SPAC process can be quick, the scaling and implementation of the necessary internal structure to serve the finance needs of a newly public company require investment and focus. Also, given the cultural zeitgeist around SPACs lately, even though we’ve been de-SPACed and public for months, we’re still often lumped in with the SPAC news — for better or worse.
“Going public creates a new set of stakeholders... who are all critical, but it is important to not stray from staying close to the customer and employees.”
How do you structure your teams to maximize innovation and attract top talent?
We currently have six divisions within the organization and all of our business units roll up into one of these divisions. We run a decentralized operating model which allows the business units to make decisions quickly and maintain their velocity. The few high-value-creating areas that we do integrate are transactional monetization, demand streams to cross-sell and our data platform.
When it comes to fostering innovation post-IPO, what should leaders in your position know ahead of time as their company prepares to go public?
Going public creates a new set of stakeholders — public shareholders, analysts, independent board members — who are all critical, but it is important to not stray from staying close to the customer and employees, both of whom will determine how successful the business will become. As the business scales in the public markets, it is important to maintain velocity and think about speed as a competitive advantage. Design the organization to allow you to move fast and remain entrepreneurial. Not only is this good for the business and shareholders, but you’ll be able to recruit and retain top talent who have a platform to do their very best work.