Pylon is a startup that is helping lenders and FinTechs embed end-to-end mortgage tools, and it has reportedly raised $8.5m in its seed round.
The investment was led by Conversion Capital who served as the lead investor. Other commitments came from Peter Thiel, Fifth Wall, Montage Ventures, QED Ventures and Village Global.
Additional funds were supplied by angel investors from Zillow, SoFi, Ramp, Figure and Blend.
Pylon was founded in 2022 by Trent Hedge and Marco Monteiro, with the aim of making credit services easier to implement.
Co-founder Trent Hedge came to this idea whilst working at his previous business Atmos, a custom construction firm. The biggest request Atmos would receive was for mortgage loans, which sparked the idea for helping non-traditional lenders offer them.
He explained that to build a lender or mortgage broker, the firm would need to be licensed by each state of operation. They would then need to gain area expertise, stand up capital markets, raise debt facilities and get approval from Dannie Mae. To get set up, a firm is looking to spend millions and one to two years of development.
Speaking to Forbes, Hedge said, “I looked at it and was like, ‘this doesn’t make any sense’. We’ve seen banking as a service as a whole. We’ve seen those folks build this standardised infrastructure layer and we haven’t seen that in mortgage. I’ve been thinking about it for the last few years.”
Pylon is a unified stack from software to compliance and capital markets that empower customers to launch mortgage products. Its features include end-to-end white labelling, flexible API and integrations, table funding and capital markets, underwriting logic and regulatory compliance.
In other marketplace lending news, building society Nationwide has launched an API integration with end-to-end mortgage platform Smartr365. This comes on the back of a successful pilot and aims to save brokers an hour each day.
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