Porch Group secures $333m convertible notes financing


Porch Group, a vertical software company reinventing the home services and insurance industries, has secured $333m in convertible notes financing.

Seattle-based Porch Group provides software and services to approximately 30,900 home services companies, such as home inspectors, moving companies, loan officers, title companies, real estate agencies, utility companies, and warranty companies.

Through these relationships and its multiple brands, Porch Group provides a moving concierge service to homebuyers, helping them save time and make better decisions on critical services, including insurance, warranty, moving, security, TV/internet, home repair and improvement, and more.

The New Notes offering and Existing Notes repurchase are expected to close concurrently on April 20, 2023, subject to customary closing conditions.

The New Notes will be convertible into cash, shares of common stock of the company, or a combination of cash and shares of common stock at Porch’s election at an initial conversion rate of 39.9956 shares of common stock per $1,000 principal amount of the New Notes, which is equivalent to an initial conversion price of approximately $25.00 per share.

Porch intends to use the net proceeds from the New Notes offering to repurchase $200 million of the Existing Notes and to fund the repayment of a $10 million senior secured term loan of a Porch Group subsidiary, in each case plus accrued and unpaid interest thereon and related fees and expenses, and use the remainder of the net proceeds for general corporate purposes.

Shawn Tabak, Porch Group CFO, said, “This transaction will allow us to reduce our medium-term debt maturity from $425 million to $225 million, while delivering additional liquidity to the business, all while minimizing dilution by maintaining a $25 per share conversion price.”

Earlier this year, Coverdash, a fully-digital business insurance startup providing simplified insurance solutions to businesses, closed an oversubscribed seed funding round and officially launched.

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