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Citigroup invests in digital mortgage company Better Mortgage

Citi becomes latest big name to fund mortgage tech startup

The investors in digital mortgage company and 2018 HW Tech100 winner Better Mortgage are a veritable who’s who of the finance space. And there's a new big name joining that list.

Just last month, the company announced that American Express Ventures, the strategic investment group of American Express, led its $70 million Series C funding round.

Another of the biggest names in financial services is also one of Better Mortgage’s backers. That would be Goldman Sachs.

And now, the digital mortgage company boasts a new investor: Citigroup.

Better Mortgage announced Thursday that Citigroup has made an investment in the company, although Better did not specify just how much of an investment Citi is making.

In a release, the company describes Citi’s investment as an “add-on” to the company’s $70 million Series C funding. But the news release pegs the company’s Series C funding at $75 million after Citi’s investment, which would lead one to believe that Citi invested $5 million in the company.

But a spokesperson for Better Mortgage told HousingWire that the company is not disclosing the details of Citi’s investment.

Regardless of the dollar amount, the fact that Citi, Amex, and Goldman Sachs have invested in Better shows that the company and its business model has some appeal.

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.

And the company is finding success.

Since launching three years ago, Better Mortgage has grown significantly. 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.

The company expanded throughout 2018, adding 13 more states throughout the year. The company also expanded into four new states already this year.

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.

And with the backing of American Express and Citigroup, the company plans to continue expanding.

“We are proud and humbled to be partnering with Citi. As one of the world’s premier consumer banks with deep roots in the mortgage business, Citi has a unique perspective and understanding on the innovation Better.com is bringing to home finance,” Vishal Garg, CEO and founder of Better.com, said. “We hope to learn from them and partner with them to make the future of homeownership better for all Americans.”

Citi’s investment in Better is also interesting considering the company’s love-hate relationship with mortgages in the last few years.

Last year, the company dove headfirst into digital mortgages, partnering with Digital Risk and Black Knight to form a digital mortgage origination platform. The company also appointed a new mortgage management team, but its originations suffered last year.

And two years ago, Citi got out of mortgage servicing.

But, Matt Zhang, Citi’s head of spread products investment technologies, said the investment in Better makes sense for the megabank.

“Better.com is a phenomenal success story,” Zhang said. “This investment round underlines the brand’s continued growth and further commitment to world-class operational execution. We look forward to this partnership and are thrilled to be a part of the continued growth and progress of Better.com.”

As is Goldman Sachs and American Express. How interesting.

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