- Rocket Companies, (NYSE: RKT) announced this week that it is buying Truebill for $1.275 billion in cash. This is why.
Rocket Companies, (NYSE: RKT) – the Detroit-based platform company consisting of tech-driven real estate, mortgage, and financial services businesses, including Rocket Mortgage, Rocket Homes, and Rocket Auto – announced this week that it is buying Truebill, the leading personal finance app that helps consumers manage every aspect of their financial lives, for $1.275 billion in cash.
Truebill quickly became the choice for consumers looking to improve their best financial lives by managing subscriptions, improving credit scores, tracking spending, and building budgets in an easy-to-use app. And the company also renegotiates bills on its clients’ behalf – saving them as much as 20% on services including cable and telephone bills.
Launched in 2015, Truebill currently has 2.5 million members and has doubled its user base in just the last year. And the company currently analyzes $50 billion in monthly transaction volume and has saved consumers more than $100 million since its founding.
Truebill’s ability to utilize technology to constantly improve their clients’ financial health adds to Rocket Companies’ end-to-end real estate and home financing platform and quickly growing automotive sales marketplace, which brings Rocket Companies closer to the goal of creating a centralized destination for consumers to manage their entire financial lives.
Every year, Rocket Companies interacts with tens of millions of potential clients looking to buy a car, buy or sell a home, or to get a mortgage. And most of them are simply investigating their options and are not ready to transact.
By adding Truebill’s financial wellness services, Rocket Companies will have both a new organic growth opportunity and a significant channel to nurture clients, thus keeping them engaged in the company’s FinTech ecosystem by providing value between the large financial transactions that Rocket Companies is known for.
This new line of business will also add consistent monthly revenue for Rocket Companies. And the monthly payments made by clients to the company’s mortgage servicing operations generate $1.3 billion in servicing income on an annualized basis. Rocket Companies is boasting 2.5 million serviced clients and has an industry-best retention rate of 91%.
Truebill is now on track to generate $100 million in annual recurring revenue. And that number is consistently growing, with 2021 revenue more than doubling that of 2020.
This deal is expected to close prior to the end of the year.
KEY QUOTES:
“We are very impressed with what Truebill has created – providing a simple, intuitive client experience to help its users save significant money. The company is a perfect fit for the Rocket platform. Truebill’s work helping Americans keep track of their finances and providing guidance that leads to better financial outcomes follows the same philosophy as Rocket Companies – leveraging the power of technology to remove the friction from complex transactions – and applies it to everyday life.”
— Jay Farner, CEO of Rocket Companies
“What my co-founders and I originally created as a subscription cancelation app has become so much more. Now, millions of Americans are trusting us to help them take control of their financial lives. By joining forces with the Rocket FinTech powerhouse, we will be able to extend our reach and seamlessly connect consumers with even more services. The synergy between Truebill and the Rocket Companies platform could not be stronger, especially when you consider the importance of home ownership as the centerpiece of a healthy financial life.”
— Haroon Mokhtarzada, co-founder and CEO of Truebill
