Let Valuation Tech Help Improve Your Collateral Valuation

Join this webinar to learn how technological advancements in valuation provide solutions to help lenders and servicers deliver more comprehensive offerings to their clients.

Talking proptech with FinLedger Director Holden Page

In this episode, Page discusses the hottest topics coming across FinLedger’s news desk. Topics include: the online banking market, what’s happening in the proptech space and recent private market deals.

engage.marketing 2021

We brought together the smartest minds in purchase marketing to share the insights, tactics and strategies that set the leaders apart. Watch the sessions on-demand now!

How Rocket Pro TPO continues to give its broker partners the upper hand

To remain competitive and create a better experience in this purchase environment, brokers need one thing above all: Speed. And there’s one lending partner that has the solutions and resources to give LOs just that.

IPO / M&AMortgage

Better.com to go public via SPAC at $7.7B valuation

Debut would come later this year

The special purpose acquisition company market isn’t dead yet, apparently. SoftBank Group-backed digital lender Better.com plans to make its public debut in the fourth quarter of 2021 via SPAC, in a deal that would value the company at nearly $8 billion, the firm said Tuesday.

Better.com, which offers mortgage, real estate, title and homeowner insurance through its digital platform, has entered an agreement to merge with Aurora Acquisitions Corp., a blank check company sponsored by Novator Capital. As part of the deal, a SoftBank subsidiary will commit to a $1.5 billion investment into the combined company. Novator would also invest $200 million into the merged company.

“This transaction is the beginning of an amazing new chapter in Better’s history,” said CEO Vishal Garg. “This transaction provides investment capital to accelerate Better’s growth and support our mission to make homeownership simpler, faster, more affordable and more accessible for all Americans, and eventually everyone else.”

Better.com, founded in 2016 by Garg, a serial entrepreneur, would have a post-equity value of $7.7 billion following the merger, the company claimed. That would make it one of America’s most highly valued nonbank mortgage companies (just behind Rocket Mortgage and United Wholesale Mortgage), even if the lender’s production currently lags behind its legacy competitors and is heavily dependent on refi business.

There’s no doubt that Better.com has grown at a phenomenal rate since its founding. The company generated $24.2 billion in mortgage originations in 2020. It claims the platform also placed $7.7 billion in title insurance and $1.4 billion in homeowners insurance. The company generated about $850 million in 2020 revenue and about $250 million in profits, according to the Wall Street Journal, which first reported on the SPAC deal. Better.com originated roughly $14 billion in the first quarter of 2021, the Journal reported.


The digital journey starts at acquisition

Competition is going to increase quickly as the nation recovers from the pandemic, and those who are using tech to keep their pipeline flowing will be better equipped to compete and win new business. Download the white paper for a playbook to building a tech-enabled acquisition strategy for growth.

Presented by: LQ Digital

Unlike many legacy lenders that have integrated tech in fits and starts, Better.com was built at the onset to be entirely digital. Its workforce of loan originators is entirely in-house and does not work on commission. Better.com said its labor cost was 57% lower than the industry average and its LOs close 16.2 loans per months, compared to the industry average of 7.1 per month. The firm is currently licensed in 47 states and Washington, D.C.

But there have been real questions about the company culture following a brutal Forbes report on bullying. Beyond that, it’s unclear if Better.com can thrive in a higher rate environment, when refi business falls and lenders typically rely on a human network of distributed retail loan officers or mortgage brokers to generate purchase business. Also unclear is how investors take to another mortgage company going public.

The only other major mortgage lender to go public via a SPAC has not quite been embraced by investors. UWM’s stock was trading at $6.30 a share on Tuesday morning, well below the $10 mark at the time of the merger with Gores Holdings IV.

Better.com, which was last valued at $6 billion, previously raised money from investors including Goldman SachsKleiner Perkins Caufield & Byers and Healthcare of Ontario Pension Plan. It also has partnerships with American Express, Ally Financial and Progressive Insurance.

Leave a comment

Most Popular Articles

Will we ever see a “normal” housing market again?

The question on everyone’s minds: When will this hot housing market cool down? Arch MI investigates this and more in its Spring Housing and Mortgage Market Review.

Jun 22, 2021 By

Latest Articles

TitleWave launches Colorado branch

TitleWave Real Estate Solutions of Florida has announced a new location in Colorado, as well as the launch of its title and search report technology.

Jun 24, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please