(Bloomberg) -- Orchard, a startup that offers cash to homebuyers upfront so they can purchase a new residence before selling their old one, is seeking to raise about $75 million, according to people with knowledge of the matter. 

Led by Chief Executive Officer Court Cunningham, Orchard is attempting to raise the funds through a convertible note slated to convert at the lesser of $600 million or a discount to its next common equity round, said the people, who requested anonymity as the capital raising effort is private. The firm is working with an adviser to solicit interest from potential investors, they said.

Orchard spokesperson Mandy Menaker declined to comment on the “value and structure or any aspect of investor discussions.” As with all transactions that aren’t finalized, it’s possible terms and structure change.

The company was valued at more than $1 billion in a funding round last year. Boston-based Accomplice led that round, with existing investors FirstMark, Revolution, First American and Juxtapose also participating.

The startup’s second-quarter results were the strongest in its history, Menaker said, without providing specifics. Its gross transaction volume -- the value of homes bought and sold using Orchard -- was approaching an annual run rate of $1.5 billion, Cunningham said last September.

As soaring inflation and turbulence in public equities weigh on private markets, cash-hungry startups such as GoPuff have raised capital through convertible notes, in part because they delay the need to lock in a fresh valuation. The notes, which have debt-like characteristics, benefit investors by providing a limit to potential losses compared with traditional equity, which can be completely wiped out.

Cooling US home sales have weighed on mortgage lenders, brokerages and other industry players. The slowdown has slashed the market values of companies including Zillow Group Inc. and Redfin Corp., and pushed others to reduce workforces.

Orchard rival Flyhomes has laid off around 200 staff, citing “uncertain economic conditions,” according to LinkedIn posts by affected employees. A representative for the company said that the layoffs affected 20% of employees and declined to comment further.

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