Better.com Closes Series C at $160 Million
Better.com has closed its Series C fundraise at $160 million, bringing the company’s total funding to $254 million. Activant Capital, Ping An Global Voyager Fund, Ally Financial, Citi, AGNC, Healthcare of Ontario Pension Plan (HOOPP) and American Express Ventures joined existing shareholders Goldman Sachs, Pine Brook, and Kleiner Perkins in the round.
The new investment round comes amid a period of tremendous growth for the fin-tech disruptor: Better.com has grown 3x year-over-year and is currently funding $375 million in mortgages a month. This puts the company on track to lend over $4 billion in 2019. Better.com also funded $1 billion of loans in Q2 of this year alone, more than in all of 2016 and 2017 combined.
Better.com was created in 2016 after its founder, Vishal Garg, lost a home to an all-cash buyer due to a slow and antiquated traditional mortgage process. His wife was pregnant with their second child at the time. He used the money he had saved for the down payment to start Better.com, which has digitized the entire mortgage process to eliminate commissions, fees, unnecessary steps, and time-wasting branch appointments. Customers are able to upload and eSign documents, get loan estimates in seconds and a pre-approval within minutes. Better.com is also able to close a typical mortgage 50% quicker than the industry average (21 days vs. industry average of 42 days).
The startup’s commission-free business model also allows borrowers to save more than $3,000 on average in up-front costs, or over $700 a year in interest payments on a typical $300,000 conforming loan mortgage.
“Similar to how Amazon upended the retail industry, Better.com is digitally disrupting the $15 trillion mortgage industry through best-in-class technology, a commission-free business model and first-rate customer support. 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.” – Vishal Garg, CEO and Founder of Better.com.
Better.com’s rise as a leading online lender comes at a time when digital-native and cost-conscious millennials now account for the group responsible for the most new mortgages. Millennials also now make up 42 percent of all mortgage dollars originated in the United States. For context, 78% of homes were purchased with a mortgage in 2018.
“Better.com is reengineering and digitizing the mortgage process, making the entire home-buying experience faster and more affordable,” said Lindsay Fitzgerald, Managing Director at Amex Ventures, the strategic investment group of American Express. “We are delighted to support Better.com as they continue to grow and transform the market.”
In the last year, Better.com added 550 new hires and moved its headquarters to 7 World Trade Center to accommodate its rapid growth. The company also opened additional offices in Irvine and Oakland, CA in 2018 and in Charlotte, NC just this month.
To continue its growth, the fin-tech disruptor anticipates hiring an additional 400 people in sales and technology by the end of 2019.