Goldman Sachs and Kleiner Perkins-backed mortgage startup Better.com is eyeing an IPO in two to three years - just days after closing a $160 million Series C round
- Better.com just closed a $160 million Series C funding round - and the company is already eyeing up plans for an initial public offering.
- Vishal Garg, founder and CEO of the mortgage tech company, told Business Insider he'd like his rapidly growing company to tap the public markets in two to three years.
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Mortgage tech company Better.com took its time closing a $160 million Series C funding round, but now it's already eyeing a foray into the public markets.
Better, a digital platform that strips away fees and wait times from the mortgage process, said Monday it closed a funding round nearly nine months in the making that valued it north of $600 million. It started in January with a $70 million investment from a group including American Express Ventures, and now has raised more than twice that with the addition of several more big-name investors, including Activant Capital, Citigroup, Ally Financial, and China's Ping An, the largest life insurance company in the world.
These investors join a roster that includes early backers like Goldman Sachs and Kleiner Perkins.
With the ink on that deal barely dried, founder and CEO Vishal Garg is eyeing up a potential initial public offering. Garg wants the company, which was formed in 2014 but launched in 2016, to go public in the next two to three years, he told Business Insider in an interview.
"Our strategy is: We're going to do one more round and then we're going to IPO. The company's growth is really strong. We're making money on a gross margin basis," Garg said. "We don't have a crazy voting structure. We don't have a lot of the bells and whistles that other people have. We just have a really clean, nice little business."
Better provides loans directly through its website but also offers its services to banks angling to upgrade their mortgage offering. It originated $1.3 billion in mortgages in 2018 and says it's on pace to eclipse $4 billion this year. In April it struck a deal with online lender Ally, which is outsourcing its mortgage operations to the startup.
Better's proprietary mortgage business is blossoming, but that's only one of the opportunities the company is trying to finance. It launched mortgage insurance and title insurance this year - businesses Garg said could be as big as their original mortgage offering in the next two to three years - and is delving into life insurance next. They're also building out realtor and appraisal networks.
And on the back of the Ally deal, Better is also in talks with other financial institutions about partnering up, Garg said.
"We have a number of really huge potential partners coming in behind Ally and so we need to blitz scale," he said.
The company is aggressively hiring to manage these ambitions. Garg says it expects to have 1,100 employees by year end, up from roughly 200 at the start of 2019.
"The reality of it is that investors are starting to believe that what we're doing is the right thing and that we're actually going to succeed in making homeownership better," Garg said. "I'm gonna take this money and we're going to build hard sh*t. We are not going to sit here and be a one-trick pony and blow smoke. We're going to do the hard stuff."
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