- Better.com, one of the fastest-growing homeownership platforms in the country, announced it raised $160 million
Better.com — one of the fastest-growing homeownership platforms in the country — announced it raised $160 million in Series C funding. Including this round of funding, Better.com has raised $254 million to date. Activant Capital, Ping An Global Voyager Fund, Ally Financial, Citi, AGNC, Healthcare of Ontario Pension Plan (HOOPP) and American Express Ventures are joining existing shareholders Goldman Sachs, Pine Brook, and Kleiner Perkins in the round.
This funding round comes on the heels of tremendous growth for Better.com. For example, Better.com is growing 3x year-over-year and is currently funding $375 million in mortgages a month. At this run rate, Better.com is on track to lend over $4 billion in 2019. And Better.com also funded $1 billion of loans in Q2 of this year alone, more than in all of 2016 and 2017 combined.
The idea for Better.com came together after founder Vishal Garg lost a home to an all-cash buyer due to a slow and antiquated traditional mortgage process in 2016. When this happened, Garg’s wife was pregnant with their second child at the time. So he used the money he had saved for the down payment to launch Better.com, which has digitized the entire mortgage process to eliminate commissions, fees, unnecessary steps, and time-wasting branch appointments.
“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,” said Garg in a statement. “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.”
Through the Better.com platform, customers are able to upload and eSign documents, get loan estimates in seconds and a pre-approval within minutes. And Better.com is also able to close a typical mortgage 50% quicker than the industry average (21 days vs. an industry average of 42 days). And Better.com’s commission-free business model also enables 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).
“Better.com is reengineering and digitizing the mortgage process, making the entire home-buying experience faster and more affordable,” added Amex Ventures managing director Lindsay Fitzgerald. “We are delighted to support Better.com as they continue to grow and transform the market.”
This past year, Better.com added 550 new hires and moved its headquarters to 7 World Trade Center to accommodate its rapid growth. And the company also opened additional offices in Irvine and Oakland, CA in 2018 and in Charlotte, NC this month.
“Better.com is completely changing the way consumers purchase a home. Their end-to-end digital solution is simplifying the mortgage process for people, affecting billions of dollars’ worth of home sales. The team is effectively overhauling the way millions of Americans make the most meaningful investment of their lives. We’re thrilled to work with them as they continue to grow,” added Better.com board member, investor, and Activant Capital founder Steve Sarracino.
Along with Sarracino, Better.com recently added former CFPB Director Raj Date and Pine Brook managing partner and co-founder William Spiegel to its Board of Directors.
“Pine Brook has been an investor in Better since it launched in 2016. It is exciting to see how the management team’s vision has turned into reality as the company has grown over 10x in just 3 years and become an innovative leader in the mortgage market. I am proud to join the Better board and help the company continue its impressive growth and be the preferred financial partner for consumers buying or refinancing a home,” explained Spiegel.
To continue the company’s growth, the company is anticipating hiring an additional 400 people in sales and technology by the end of 2019.