Blend Labs, a leading provider of cloud banking services, and Haveli Investments (a technology-focused private equity firm) announced a $150 million investment in Blend Labs by Haveli Investments in the form of convertible preferred stock with a 0% coupon. Blend will use about $145 million of the proceeds to repay all amounts payable under its existing credit agreement and the remainder for general corporate purposes. This funding further strengthens Blend’s financial position and balance sheet for long-term growth and value creation.
Haveli Investments bought $150 million of Series A convertible preferred stock. And this Series A preferred stock will be convertible into shares of Blend’s Class A common stock at an initial conversion price of $3.25 per share, representing a 31% premium to the closing price on April 26, 2024, and a 13% premium to the volume-weighted average closing price over the 30-day period ending on the same date. This preferred stock can be converted into Class A common stock at any time. And Haveli may require Blend Labs to repurchase the preferred stock after five years and Blend may redeem the preferred stock after seven years.
Blend issued Haveli a warrant to purchase about 11 million shares of Class A common stock, at a purchase price of $4.50 per share, representing an 81% premium to the closing price of April 26, 2024, and a 57% premium to the volume-weighted average closing price over the 30-day period ending on the same date. This warrant represents a total consideration of up to $50 million and is exercisable for a period of 24 months.
In connection with the investment, Brian Sheth, Chief Investment Officer of Haveli Investments, will join Blend’s Board of Directors.
Financial Technology Partners (FT Partners) served as Blend’s financial and strategic advisor. Wilson Sonsini Goodrich & Rosati, P.C. served as Blend’s legal advisor. Jefferies served as financial advisor to Haveli. And Bailey Duquette P.C. served as legal advisor to Haveli.
KEY QUOTES:
“This partnership with Haveli reflects confidence in Blend’s continued journey to transform financial services and is an important show of faith in our growth strategy. We look forward to working with Haveli to advance our goal of driving innovation in the space and delivering lasting value for our customers and shareholders.”
- Nima Ghamsari, Co-founder and Head of Blend
“We are pleased to announce our partnership with Blend, a market leader in both Mortgage and Consumer Banking software for banks, credit unions, and other lending institutions. We have known the Blend team for several years and have been impressed with their innovation and vision. With a blue-chip customer base and an improved balance sheet, we believe Blend is well positioned to succeed with its modern, next-gen platform. We’re excited to start this partnership, and we believe that we can work together with Blend to increase long-term value for all shareholders, customers, employees, and other key stakeholders.”
- Brian Sheth, Chief Investment Officer of Haveli Investments
