Better Mortgage gears lending toward millennials with UberX model
With its latest round of funding, the mortgage fintech company will continue to build its digital platform, with a goal of reducing the complexities and costs of home buying.
Better Mortgage closed its Series C round of funding at $75 million behind a $5 million add-on investment from Citigroup.
"We are proud and humbled to be partnering with Citi. As one of the world's premier consumer banks with deep roots in the mortgage business, Citi has a unique perspective and understanding on the innovation Better.com is bringing to home finance. We hope to learn from them and partner with them to make the future of homeownership better for all Americans," Vishal Garg, CEO and Founder of Better.com, said in a press release.
Since launching in 2016, the startup funded loans in 30 states totaling over $2 billion in volume, with a three times year-over-year origination increase in 2018. Better Mortgage's aggressive growth spilled over to its staffing, as 315 people were hired between August and December 2018, bringing its total near 500 employees.
The commission-free lender adapted an UberX model to the mortgage industry to appeal to the next wave of buyers, mainly millennials.
Citigroup's mortgage production tapered off since the close of 2016, so this investment could be a way to bolster those numbers. Citigroup joins American Express Ventures, Healthcare of Ontario Pension Plan, Kleiner Perkins, Goldman Sachs and Pine Brook as Better's other backers. Notably, Goldman was a Series A investor and continues to be a financer.
"Better.com is a phenomenal success story," said Matt Zhang, head of spread products investment technologies at Citigroup. "This investment round underlines the brand's continued growth and further commitment to world-class operational execution. We look forward to this partnership and are thrilled to be a part of the continued growth and progress of Better.com."