InvestmentsMortgage

Better Mortgage raises $15 million to fund expansion

Series B funding includes Goldman Sachs, Kleiner Perkins, Pine Brook

Since launching in roughly one year ago, online mortgage lender Better Mortgage funded more than $500 million in loans, and now the company plans to expand thanks to a $15 million round of funding.

The company announced recently that it completed Series B funding from three investors, including Goldman Sachs, which is increasing its investment in the online lender.

Last year, Goldman Sachs participated in a $30 million funding round for Better Mortgage, which was the first investment in a mortgage bank by a major Wall Street firm in almost 10 years.

Now, Goldman Sachs is investing again, along with Kleiner Perkins and Pine Brook.

According to the company, it will use the money to support the launch and expansion of Better's home purchase finance product on the company’s website, Better.com.

“We built the best customer experience out there; the one we would want for ourselves, our friends and family," said Vishal Garg, founder and CEO of Better Mortgage. “With over half a billion dollars in loans originated in our first year—more than any other fintech startup in its initial year of launch—consumers have confirmed that we are onto something extraordinary.”

HousingWire Magazine also honored Garg recently as one of the 2016 HW Vanguard Award winners, an award given to the top executives leading the mortgage industry.

“Better is a breakthrough for consumers in the mortgage market," Noah Knauf, general partner at Kleiner Perkins, said. “The next generation of homebuyers will expect a customer experience that none of the current industry players are equipped to deliver, and we're very excited to join Goldman Sachs and Pine Brook in helping Better transform the market.”

Better Mortgage currently operates in California, New Jersey, North Carolina, Pennsylvania, Washington, Oregon, Connecticut, Illinois and Washington D.C., and plans to continue expanding its licensed geographic footprint in 2017.

“Technology has upended personal finance, replacing expensive middlemen with intuitive and transparent online processes," said Nicholaos Krenteras, partner at Pine Brook.

“The exception has been the mortgage origination business, which has been sheltered by onerous capital, regulatory, and operating requirements,” Krenteras continued. “Innovation in the industry has been defined by traditional players patching together third-party services, leading to poor borrower experiences and runaway costs. In contrast, Better built a seamless digital platform from the ground up.”

[Update: This article is update to reflect Goldman Sachs' funding of Better Mortgage.]

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