Digital mortgage lender Better.com raised a massive $500m round from Japanese investment conglomerate SoftBank that values the New York-based company at $6bn, up from $4bn in November.
Other backers include Goldman Sachs, Kleiner Perkins, American Express, Activant Capital and Citi, among others.
SoftBank is buying shares from Better’s existing investors and agreed to give all of its voting rights to Garg “in a sign of its eagerness” to back the company.
The investment brings Better.com’s total funding raised to over $900m since its inception in 2014. The new fundraise comes after its $200m Series D round last year and the company’s valuation has grown tenfold from $600m at the time of its Series C raise in August 2019.
Launched in 2016 by Vishal Garg, a former analyst with Morgan Stanley, Better lent $25bn last year and has extended $14bn in loans in Q1 2021 already, it said.
Additionally, the company generated $800m in revenue last year as well as profits and is expected to go public by the end of 2021.
Better’s platform aims to disrupt the traditional mortgage industry which has predominantly been face-to-face by moving the entire process online. It enables customers to upload and eSign documents and claims to cut the closing time from an industry average of 42 days to 21 days. A digital approach not only cuts time but also reduces bias against minorities when applying for mortgage loans, it said.
The key reasons driving the firm’s rapid growth can be attributed to the ongoing Covid-19 pandemic coupled with high mortgage rates which make it tough to get loans, the firm added.
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