Home Topics Real Estate SoftBank is investing $ 500 million in fintech startup Better.com

SoftBank is investing $ 500 million in fintech startup Better.com

Better.com is set to receive $ 500 million from SoftBank’s Vision Fund, according to a WSJ article on Thursday. This puts better.com’s valuation at 6 billion US dollars.

After the success with Compass and Opendoor, SoftBank is looking for the next golden goose in the real estate industry. As the fintech industry accelerates in an increasingly digital world, the Japan-based conglomerate has used its Vision Fund to invest millions in fintech startups. Better.com is the newest company to benefit from a multi-million dollar cash infusion.

The digital mortgage startup is receiving $ 500 million from the SoftBank Vision Fund, according to a Thursday report in the Wall Street Journal. According to WSJ, the two companies have been discussing terms of the deal since late last year as Better.com’s valuation rose from $ 200 million to $ 4 billion after a Series D financing round.

SoftBank founder and CEO Masayoshi Son was optimistic about his investments. The CEO said his recent successes with Opendoor, Compass, SoFi and Doordash demonstrate his ability to pick Wall Street’s next darling.

“Since the Vision Fund launched, the number of golden eggs in acceleration mode has actually been increasing,” said Son, according to a previous Inman article. “About a year ago, a lot of the media said we were only laying bad eggs. Now we are in harvest time. “

The WSJ article states that Son is getting his business with Better.com on the same uptrend as he allegedly agreed to give up all of SoftBank’s voting rights to Better.com founder and CEO Vishal Garg in order to end the deal sweeten.

“As a token of its willingness to put money into Better, SoftBank agreed to transfer all voting rights to the company’s CEO and co-founder, Vishal Garg, some respondents said. Mr. Garg is not selling any of his shares in the offer – and the company will not generate any proceeds, ”the article says.

Better.com declined to comment on the story. However, Inman was able to confirm the validity of the WSJ’s article with relevant sources.

Better.com thrived during the pandemic when low interest rates sparked a boom in home buyer demand. The five-year-old company, which also provides real estate remittances, homeowner insurance, and settlement services, extended $ 25 billion in loans in 2020, resulting in $ 800 million in revenue. The company issued $ 14 billion in loans in the first quarter of 2021 and is expected to go public with competitor Caliber Home Loans Inc. soon.

The mortgage industry is high on Wall Street. United Wholesale Mortgage closed its largest-ever listing through a special purpose acquisition company (SPAC) in January, and Rocket Mortgage parent company Rocket Companies raised a staggering $ 1.8 billion when it went public in July 2020.

However, it wasn’t all peach and cream – Homepoint and LoanDepot cut their offers by more than 50 percent just a few days before the doorbell rang. Both companies raised $ 94 million and $ 54 million, respectively, far from their original targets of $ 250 million and $ 362.5 million.

AmeriHome Mortgage abandoned its $ 250 million initial public offering in October but revived its plans after a profit of $ 174 million in the third quarter of 2020, according to HousingWire.

“The average investor doesn’t believe that a mortgage company is a good choice when it comes to owning stocks,” Inside Mortgage Finance CEO Guy Cecala told WSJ of the mortgage company IPO market. “It’s a cyclical business and they’re not sure what’s going to happen.”

Email Marian McPherson


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