Digital mortgage company and 2018 HW Tech100 winner Better Mortgage already boasts one of the biggest names in financial services as one of its backers: Goldman Sachs. And now, another financial giant is jumping on board.
Better Mortgage announced Thursday that it raised $70 million in its Series C funding round, which was led by American Express Ventures and the Healthcare of Ontario Pension Plan.
American Express Ventures is the strategic investment group of American Express.
Also participating in the funding round were Better Mortgage’s earlier investors, including Kleiner Perkins, Goldman Sachs, and Pine Brook.
Each of those companies participated in Better Mortgage’s Series B funding round nearly two years ago, in which the company raised $15 million.
And now, nearly two years later, the company raised nearly five times that amount in this latest funding round.
According to Better Mortgage, it plans to use the money to support its continued growth and invest in the company’s technology platform.
Since launching three years ago, Better Mortgage has grown by leaps and bounds. Last year, the company doubled its geographic footprint and originated $1.3 billion in mortgages, representing an approximate increase of 300% from the prior year.
Better’s platform works by moving the mortgage process completely online. Its customers are able to upload and eSign documents, have instant access to lending discounts and receive personalized mortgage recommendations.
The company expanded throughout 2018, adding 13 more states, and the company isn’t done there either.
Better Mortgage also announced this week that it is launching in four new states: Alaska, Kentucky, Oklahoma, and West Virginia.
With those four additional states, Better Mortgage is now available in 30 states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, New Jersey, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, West Virginia, Wisconsin, plus Washington, D.C.
The company’s rapid expansion and its platform’s capabilities are what drove Amex to invest in the company.
“Buying a home is one of the biggest financial life events that our customers experience, but the process is often full of pain points,” Lindsay Fitzgerald, managing director of Amex Ventures, said. “By building a mortgage platform to be fully digital from the ground up, Better Mortgage has reduced the complexity around the homebuying process. We’re excited to support Better Mortgage's next phase of growth.”
The investment from the Healthcare of Ontario Pension Plan in a mortgage company is also an interesting one, given that so many pension plans and retirement funds took heavy losses in the financial crisis after investing in mortgage-backed securities.
But Jennifer Shum, assistant vice president of derivatives and fixed income at HOOPP, said they believe Better Mortgage is a sound investment.
“We believe Better Mortgage is uniquely positioned for exceptional growth in the marketplace and offers a valuable service to prospective clients,” Shum said. “We were drawn to this investment because of its strong management team, the sophistication of its technology and the market opportunity.”
And now, Better Mortgage has a whole bunch of new money to go try to capture that market share.