Better.com

Better Holdco, Inc. (Better or Better.com) is an American company which operates an online platform for mortgage origination and related services.[1] Founded in 2014 by chief executive officer Vishal Garg,[2][3][4] the company launched its first business Better Mortgage in 2016[5][6] and later added subsidiaries dedicated to real estate, title and homeowners' insurance services. The company is backed by SoftBank and Novator, and in 2020 it secured a US$4 billion valuation.[7] The company is headquartered at 3 World Trade Center in Lower Manhattan.[8]

Better.com
TypePrivate
IndustryFinancial technology, Homeownership
Founded2014 (2014)
FounderVishal Garg
Headquarters3 World Trade Center, New York City, US
SubsidiariesBetter Mortgage; Better Real Estate; Better Settlement Services; Better Cover
Websitebetter.com

Better Holdco has gained high profile coverage for its quick rise, including plans for it to go public via a SPAC merger before the end of 2021. The deal would value the company at around $6.9 billion[9][10]

History

Incorporation and growth

In 2014 Vishal Garg incorporated Better as "Better Holdco, Inc." In an interview, Garg said that he and his wife had a negative experience obtaining a mortgage to buy their own first home, which led directly to the company's formation.[2][11]

In 2016 the company launched Better Mortgage[2] and secured $30 million in Series A funding.[12][13] The company was approved the same year to be a Fannie Mae seller/servicer.[14] Better raised Series B funding in the amount of $15 million in 2017 with Kleiner Perkins, Goldman Sachs, and Pine Brook Partners.[15] The company launched two additional subsidiaries in 2018; Better Real Estate and Better Settlement Services.[16][17] A year later, the company launched a fourth subsidiary, Better Cover, and raised $160 million in Series C funding led by Activant Capital.[2][5] In April, Ally Home announced they were partnering with Better.com to launch their own digital mortgage platform. Ally also made a contribution to the Series C round.[18] The company raised Series D funding of $200 million, led by L Catterton, in 2020.[6][19][20] In April 2021, the company raised an additional $500 million from Japanese investment conglomerate SoftBank, resulting in a $6 billion valuation.[6][21]

The number of people from traditionally underrepresented groups buying homes through Better's mortgage lending platform increased significantly in 2019, a development that The New York Times suggested was linked to the company's digital processes and minimal reliance on human brokers.[22]

In May 2021, Better announced that it planned to go public via a SPAC merger with Aurora Acquisition Corp.[23] Later that same year, Better acquired Trussle, a UK digital mortgage broker, and in September 2021 it acquired Property Partner, a London-based crowdfunding platform.[24][25]

Layoffs and controversy

On December 6, 2021, a video of Garg laying off 900 employees by videoconference and locking out their devices became widely disseminated.[26] After much criticism, Garg decided to take time off from the company,[27] but returned in January 2022.[28][29]

In March 2022, news reports surfaced that some Better.com employees started receiving severance pay before Better.com told them they were to be laid off.[30] On March 8, 2022, the company announced that 3,000 people, or approximately one-third of their employees, were laid off in an effort to streamline their business operations.[31][32]

Operations

Better sells mortgages to about 30 secondary mortgage investors, including Fannie Mae and Wells Fargo. The company obtains leads from personal finance companies such as Credit Karma and NerdWallet in order to attract customers and market to them.[22]

References
  1. Farrell, Maureen; Rudegeair, Peter (May 11, 2021). "Mortgage Lender Better to Go Public in SPAC Deal". Wall Street Journal. ISSN 0099-9660.
  2. "About Us". Better.com. Retrieved February 16, 2022.
  3. Maruf, Ramishah. "Better.com CEO fires 900 employees over Zoom". CNN.
  4. "Vishal Garg: US boss fires 900 employees over Zoom". BBC News. December 7, 2021. Retrieved January 26, 2022.
  5. Brier, Elisabeth (August 19, 2019). "Better.com, A Digital Mortgage Disruptor, Raises $160 Million In Latest Funding Round". Forbes.
  6. Azevedo, Mary Ann (April 9, 2021). "Mortgage is suddenly sexy as SoftBank pumps $500M in Better.com at a $6B valuation". TechCrunch.
  7. "Better.com's morale and SPAC merger success in question after CEO's unruly comments". Fortune. Retrieved December 7, 2021.
  8. "Contact US". Better.com. Retrieved December 7, 2021.
  9. Jeans, David. "Mortgages, Fraud Claims And 'Dumb Dolphins': A Tangled Past Haunts Better.com CEO Vishal Garg". Forbes. Retrieved December 7, 2021.
  10. "Better.com gets $750M cash infusion in new agreement with its SPAC backers". TechCrunch. Retrieved December 9, 2021.
  11. Howley, Kathleen (August 19, 2019). "Digital mortgage company Better.com closes $160 million in funding". HousingWire.
  12. Javed, Zulfiqar Ali (June 13, 2016). "Better Mortgage closes $30M in funding". S&P Global Market Intelligence.
  13. Teare, Gené; Glasner, Joanna (July 20, 2016). "CrunchBase sees some slowing for early-stage venture in the second quarter". TechCrunch.
  14. Aryan, Aashish; Mukul, Pranav (December 7, 2021). "Explained: Better.com, the mortgage company that fired over 900 employees over Zoom call". The Indian Express.
  15. Lane, Ben (February 14, 2017). "Better Mortgage raises $15 million to fund expansion". HousingWire.
  16. "Better Real Estate, LLC". opengovus.com.
  17. "Better Settlement Services, LLC". opengovus.com.
  18. Lane, Ben. "Ally Financial partnering with Better.com to launch digital mortgage platform". Housing Wire.
  19. Kirsch, Noah. "Better.com, An Online Lending Startup, Completes Series D At $4 Billion Valuation". Forbes.
  20. Solomont, E.B. (November 17, 2020). "InstaClosing Startup Offers Digital Closings". The Real Deal New York.
  21. Rudegeair, Peter; Farrell, Maureen (April 8, 2021). "SoftBank to Invest $500 Million in Mortgage Startup Better". Wall Street Journal.
  22. Miller, Jennifer (September 18, 2020). "Is an Algorithm Less Racist Than a Loan Officer?". The New York Times.
  23. de León, Riley (May 11, 2021). "SoftBank-backed mortgage lender Better going public via $7.7 billion SPAC". CNBC.
  24. de León, Riley (July 12, 2021). "Digital mortgage lender Better acquiring Goldman Sachs-backed fintech ahead of public listing". CNBC.
  25. Lawler, Ryan. "Better.com acquires UK-based Property Partner ahead of SPAC close". TechCrunch.
  26. Graziosi, Graig (December 6, 2021). "Who is Vishal Garg, the CEO that fired 900 employees over Zoom call?". The Independent. Archived from the original on December 6, 2021. Retrieved December 7, 2021.
  27. Goldberg, Emma (December 10, 2021). "Better.com's C.E.O. is 'taking time off' after firing 900 workers over Zoom". The New York Times. Retrieved January 31, 2022.
  28. Goldberg, Emma (January 19, 2022). "Better.com's founder returns as C.E.O. after firing 900 workers on Zoom". The New York Times. Retrieved January 31, 2022.
  29. Kirsch, Noah (January 18, 2022). "He's Baaaack! Ax-Wielding Better.com Founder Returns as CEO". The Daily Beast. Retrieved February 11, 2022.
  30. Azevedo, Mary Ann. "Better.com employees learned of layoffs when severance checks appeared in payroll app". TechCrunch. Retrieved March 11, 2022.
  31. Valinsky, Jordan. "Better, after firing 900 employees over Zoom, is laying off 3,000 more workers". CNN. Retrieved March 11, 2022.
  32. Goldberg, Emma (March 8, 2022). "Better.com, a mortgage lender and early pandemic winner, announces more layoffs. The company will let go more than 3,000 employees three months after gaining notoriety for firing 900 workers in a Zoom call". New York Times. Retrieved March 26, 2022.
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