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Mortgages might not be seen as sexy, but it’s big business.
If you’ve recently refinanced or bought a home digitally, you may not have noticed that the company is powering the software behind it, but tthere is a good chance that this company is Blend.
Founded in 2012, the startup has grown steadily to become a leader in the mortgage technology industry. Blend’s white-label technology powers on-site mortgage applications from banks like Wells Fargo and US Bank, for example, with the goal of making the process faster, simpler, and more transparent.
The San Francisco-based startup’s SaaS (software as a service) platform currently processes more than $ 5 billion in mortgages and consumer loans per day, up from nearly $ 3 billion last July.
Today, Blend debuted as a New York Stock Exchange listed company under the symbol “BLND. “As of early afternoon Eastern Time, the stock was trading up more than 13% to $ 20.36.
On Thursday evening, the company said it would offer 20 million shares at a price of $ 18 per share, indicating that the company was aiming for a valuation of $ 3.6 billion.
That compares to a valuation of $ 3.3 billion at the time of its last increase in January – a $ 300 million Series G funding round that included participation from Coatue and Tiger Global Management. Also, let’s not forget that Blend didn’t become a unicorn until last August when he raised $ 75 million in Series F. Over his lifetime, Blend had raised $ 665 million prior to the debut on the. Friday public market.
By depositing his S-1 on June 21, Blend revealed that its revenue had climbed to $ 96 million in 2020, from $ 50.7 million in 2019. Meanwhile, its net loss fell from $ 81.5 million in 2019 to $ 74 million. , $ 6 million in 2020.
In 2020, the San Francisco-based startup significantly expanded its digital consumer lending platform. With this expansion, Blend began offering its lending clients new configuration capabilities so they can launch any consumer banking product “in days rather than months. “
Looking ahead, the company had said it expects its rate of revenue growth “to decline in the periods to come.” He also doesn’t plan to reach profitability anytime soon, as he continues to focus on growth. Blend also revealed that in 2020, its top five customers accounted for 34% of its revenue.
Today, TechCrunch spoke with co-founder and CEO Nima Ghamsari about the company’s decision to go with a traditional IPO over the ubiquitous PSPC or even a direct listing.
On the one hand, Blend said he wanted to show his clients that this is a “long time” business by making sure there is enough material on its balance sheet to continue to grow. develop.
“We’ve had to talk and convince some of the biggest investors in the world to invest in us, and that indicates how long we’ll be there to serve these clients,” he said. “So it was a combination of our capital needs and our drive to cement ourselves as a truly credible software vendor in one of the most regulated industries. “
Ghamsari pointed out that Blend is a software company that powers the mortgage lending process and not the one that offers mortgages. As such, he works with the herd of fintechs that strive to provide mortgages.
“A lot of them are using Blend under the hood, as an infrastructure layer,” he said.
Overall, Ghamsari thinks this is just the start for Blend.
“One of the characteristics of financial services is that they are still primarily powered by paper. So a lot of Blend’s growth just goes deeper into this process than we started years ago, ”he said. As mentioned above, the company started with its mortgage product, but keeps building it. Today, it also funds other loans such as auto, personal and real estate equity.
“A lot of our growth is actually fueled by our other lines of business,” Ghamsari told TechCrunch. “There is a lot to be built as the megatrends of digitization are only just beginning in financial services. It is a relatively large industry that is undergoing a lot of change.
In May, digital mortgage lender Better.com announced it would combine with a SPAC, going public in the second half of 2021.
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