Mortgage startup Better to go public in SPAC merger
Better, “one of the fastest-growing digital homeownership platforms in the country,” and Aurora Acquisition Corp., a special purpose acquisition company, which closed its initial public offering on March 8, 2021, announced that they have entered into a definitive merger agreement that will transform Better into a publicly-listed company. The transaction reflects an implied equity value for Better of approximately $6.9 billion and a post-money equity value of approximately $7.7 billion.
Better offers mortgage, real estate, title, and homeowners insurance products through its online platform. Customers can find a rate in as little as three seconds, get approved in as little as three minutes, lock in rates in as little as 15 minutes, and close their loans in as little as two weeks. A meaningful portion of funds from this transaction will be used to fuel growth in current and adjacent businesses and to continue improving the customer experience. Additional proceeds will be used to cash-out shares from existing Better investors.
As part of this transaction, SB Management Limited, a subsidiary of SoftBank Group will participate by committing to a $1.5 billion private investment in public equity upon closing of the transaction. Aurora’s sponsor, Novator Capital will invest $200 million through the PIPE, by taking up a portion of SoftBank’s commitment, and also has committed to backstop any redemptions by Aurora shareholders of funds in its trust account, substantially increasing transaction completion certainty. Also participating in the PIPE is current Better investor, Activant Capital. Subject to customary closing conditions, the transaction is expected to close in the fourth quarter of 2021.
“This transaction is the beginning of an amazing new chapter in Better’s history. 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. This all got started because I wanted a place for my kids to call home. And through this journey I have only grown more confident in my belief that every child on this planet deserves a place they can call home, a place where they can dream, a place where they can invite their friends to play, a place they can count on to be there when they have a bad day, and one they can come back to when something like COVID happens and they just don’t want to be alone. Everyone deserves a home, and we’re not going to stop until we make it possible for everyone to not just dream of a home, but to have one. Now, every one of our customers and partners and friends will be able to participate in our growth and our mission. Together, we will make home better.” – Founder and CEO Vishal Garg.