Better.com Receives Funding As Demand For Its Digital Solution Rises
- Better.com has raised $ 500 million thanks to SoftBank’s investment.
- And the explosion in consumer demand for fully digital mortgage application processes should prompt more fintechs to add a mortgage product, providing partnership opportunities.
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The funding brings the valuation of the US digital mortgage lender to $ 6 billion, up from $ 4 billion last November when it raised $ 200 million in a Series D round. through TechCrunch. Better.com offers exclusive mortgages through a fully digital, commission-free lending process. It also integrates its offer into partner platforms such as Allied bank to improve their mortgage processes.
Pandemic conditions over the past year have fueled demand for Better.com’s digital solution, increasing its valuation amid unprecedented lending volumes.
- Borrowers have flocked to its cheap online mortgage process due to home maintenance rules and historically low interest rates. Traditional mortgage processes tend to require frequent branch visits, with closing usually involving a face-to-face meeting with all parties involved, including the lawyer, the closing agent and the lender. But the pandemic-induced lockdown measures have prompted consumers to research online application processes, which Better.com was already offering. Its platform has dramatically reduced the time and expense spent on mortgage applications: users can be pre-approved in 3 minutes, while its commission-free business model saves customers an average of $ 3,500 in fees, through CEO Vishal Garg. In addition, mortgage rates have gone into a down spiraling through 2020, encouraging both first-time purchases and refinancing.
- Better.com is already on track to break its 2020 record. Better.com has gone from processing $ 1.2 billion in loans per month before the pandemic to more than $ 2.5 billion in October, funding a total of $ 25 billion in loans for 2020. And despite falling mortgage rates up, the digital mortgage lender is already on track to break that record in the first half of 2021: it funded $ 14 billion in loan volume in the first quarter alone.
To propel its growth, Better.com should target
looking to add mortgage offer. Better.com is already partnering with banks to digitize their mortgage processes, but increased consumer demand for digital mortgage solutions could prompt fintechs to add this offering as well, providing new partnership opportunities for Better.com.
Startups from other fintech hubs are already making progress: UK Digital Wealth Manager Piggy bank helps users find the best mortgage deals, while Simple Wealth is planning a mortgage product in Canada. In the United States, Betterment currently offers education buying a home, but Better.com could position itself as the partner of choice for American fintechs interested in bringing mortgage loans to market quickly, helping it diversify its distribution channel.
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