Better.com, one of the fastest-growing digital mortgage companies, said Monday it closed on $160 million of Series C funding, with backers including Ally Financial, Citi, and American Express.
The funding round is the company's second sizable capital raise in 2019 alone. Earlier this year, Better.com raised $75 million from Citi, American Express, and others. The company's backers also include Goldman Sachs.
“Similar to how Amazon upended the retail industry, Better.com is digitally disrupting the $15 trillion mortgage industry,” said Vishal Garg, CEO and founder of Better.com. “The capital we’ve raised will enable us to accelerate our investment in product development, grow our strategic partnerships, expand our team and scale our platform to continue making it easier for borrowers to get home financing.”
Garg started his company after a deal to buy a house for his family fell through – his wife was pregnant with their second child at the time – because an all-cash buyer was able to beat the timing of his old-fashioned mortgage, the company said. Instead of getting the home, Garg used the down payment to start Better.com, which can close a mortgage in 21 days versus the industry average of 42 days, according to a company statement.
Since launching in 2016, Better has grown to cover about three-quarters of U.S. states, representing approximately 80% of the U.S. mortgage market. The company has tripled from last year and now funds $375 million in mortgages a month, according to a statement. This puts it on track to lend over $4 billion in 2019. Better.com funded $1 billion of loans in Q2 of this year alone, more than in all of 2016 and 2017 combined.
In the last year, Better.com added 550 new hires and moved its headquarters to 7 World Trade Center in New York to accommodate its rapid growth. This month, the company opened an office in Charlotte, North Carolina, after opening an Oakland, California, facility last year.
It plans to hire an additional 400 people in sales and technology by the end of 2019, the company said.
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.
This year the company added former Consumer Financial Protection Bureau Director Raj Date and Pine Brook Managing Partner and co-founder William Spiegel to its Board of Directors.
Better.com board member, investor, and Activant Capital founder Steve Sarracino said in the statement:
“Better.com is completely changing the way consumers purchase a home. Their end-to-end digital solution is simplifying the mortgage process for people, affecting billions of dollars’ worth of home sales. The team is effectively overhauling the way millions of Americans make the most meaningful investment of their lives.”