In a surprise move Tuesday night, mortgage tech company Sindeo announced it was closing its business — laying off all but a few employees to help finish out its current loan obligations.
In CEO Nick Stamos’ note posted to the company’s website, no reason was given for the closure. However, in a note to investors, advisors and friends seen by HousingWire, Stamos gave more detail about the reasons behind the move.
From Stamos’ note to investors:
Earlier this month, the investor with whom we had an executed term sheet to lead our Series C financing informed us of a new last-minute requirement to close the round, a requirement that was not realistic to achieve, given our cash position and available runway. My subsequent efforts to secure emergency bridge financing from this investor and others were also not successful.
Given the situation, I have taken the difficult action to do what is right and honor my fiduciary and legal obligations to our employees and clients. Today, we terminated 61 of our 70 employees, keeping only a small set of team members to help customers with their in-process loans and to support me in exploring options for Sindeo moving forward.
The company, which began operations with $15 million in funding in 2013, sought to change the way consumers searched, shopped and secured a mortgage. The company launched SindeoOne in October 2016 — an all-digital mortgage that purported to approve a loan in five minutes.
The company looked poised for success, adding key personnel like former Fannie Mae executive Deepak Kumar as COO and CFO in 2016, and completing successful rounds of capital raising in both 2015 and 2016 to bolster business.
In Stamos’ note posted to the website, the CEO noted the difficulty in disrupting the mortgage space but outlined the accomplishments of Sindeo’s employees.
I am simultaneously devastated, as well as incredibly proud. While Sindeo as a startup has failed, our people did not. As a matter of fact, we did what everyone said couldn't be done.
- We built a place where people could shop and apply for a mortgage from a robust marketplace of over 1000 loan programs, with one single application and one credit check.
- We secured partnerships with some of the top real estate and consumer finance brands.
- We helped our clients save millions of dollars on their home loans.
- We built a people-centric brand, putting the needs of Sindeo's clients first.