Better.com could be the next mortgage company to join the herd of lenders going public.
The company that fancies itself as the UberX of home lending just closed $200 million in Series D fundraising.
L Catterton, a private equity investor headquartered in Greenwich, Conn., led the round, alongside Activant Capital, Ally Financial, American Express Ventures, Ping An Global Voyager Fund and 9Yards Capital. The cash infusion comes 15 months after Better raised $160 million in its Series C round from August 2019. All told, Better compiled $454 million in funds starting in 2016.
The New York-based digital lender plans to use its latest pool of money to continue growing its team and building out its technology, according to a company press release. That aligns with the company’s recent expansion.
“We’ve been able to grow nearly 500% year-on-year and on average 10% to 15% month-on-month,” Vishal Garg, founder and CEO of Better.com, said in an interview at the 2020 Digital Mortgage Conference. “We’re probably the second-largest online lender today that’s pure direct-to-consumer online. We’re doing over $2.5 billion a month of volume.”
With lenders like Rocket, Guild Mortgage and United Wholesale Mortgage going public in recent months, speculation abounds as to whether Better’s latest capital raise signals an imminent IPO. However, no official filing has been made at this time and the company declined to comment on that possibility.
The white-hot demand for refinancings and purchases lead market watchers to project 2020 originations will break annual records, eclipsing $4 trillion. Going public creates an opportunity for nonbank lenders to cash in. Many already reaped the benefits and watched their stock prices grow. But some industry veterans warn that the flood of mortgage IPOs could saturate the market, create too much noise and diminish returns.
