Figure Technologies said to be mulling IPO for lending division in 2024

Figure Technologies is allegedly spinning off its lending arm into a publicly traded company next year.

Figure has purportedly tapped Goldman Sachs Group Inc., JPMorgan Chase & Co. and Jefferies Financial Group Inc. to help with the initiative, according to an article published in Bloomberg Monday.

Throughout 2023, the blockchain fintech has been beefing up its lending division by adding new home equity offerings. 

Additionally, Mike Cagney, Figure's CEO, announced in early November the company would be rolling out a private "to be announced" (TBA) trade on blockchain by the end of 2023. These products could potentially be packaged into a lending company.

The timeline for when its lending arm, dubbed LendCo, will be taken public remains unclear, though Bloomberg's report points out it may happen in the first half of 2024, at a valuation between $2 billion to $3 billion. Cagney allegedly would find another CEO to take the helm of LendCo.

Figure Technologies declined to comment. Goldman Sachs, JPMorgan Chase and Jefferies did not immediately respond.

The fintech's home equity offerings have been gaining traction among mortgage lenders, with shops such as Guaranteed Rate said to be using Figure's Lending-as-a-Service (LaaS) platform, which gives originators access to the fintech's HELOC system

Meanwhile, earlier this year, Figure launched a HELOC wholesale loan production platform and entered into partnerships with four independent mortgage bankers — CMG Financial, CrossCountry Mortgage, Fairway Independent Mortgage and The Loan Store — to provide a private-label HELOC product as first-lien business declines.

Despite volatility in mortgage lending, over $1 billion worth of HELOC volume was originated across Figure's channels in the third quarter, per the fintech, pointing to ongoing demand for the product.