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Nima Ghamsari at the Beverly Hills home where he worked during the pandemic as his business exploded and his software powered nearly a third of the US mortgage market.
Ethan Pines for Forbes
Shares of Blend Labs, a San Francisco-based mortgage software company, debuted on the New York Stock Exchange on Friday at $ 18, hitting the IPO price of $ 16 to $ 18 per share.
Blend raised a total of $ 360 million through yesterday’s IPO and has a market value of almost $ 4 billion. The offering was led by Goldman Sachs, Allen & Co. and Wells Fargo.
“If you had asked me two years ago, I would have said it didn’t really make sense for us to go public, maybe never, because we could run this private business very efficiently,” he said. said Blend co-founder Nima Ghamsari. Forbes Friday. “The reason we decided to go public is because we serve a really complicated and regulated industry, and they want to know that the partners they rely on will be around for a long time.”
Blend was co-founded by Ghamsari, now 35, who emigrated from Iran as a child and went to Stanford University, where he earned money for his living expenses by playing poker. After graduating from Stanford in 2011, Ghamsari joined Palantir Technologies, a secret big data start-up, and at just 26 he quit that job to start his own software company with former colleagues.
“I always felt like I wanted to bet on myself. I am ready to take a lot of risks, ”said Ghamsari Forbes in June.
Blend’s cloud platform is now used by 31 of America’s 100 largest financial firms, including major mortgage lenders like Wells Fargo and US Bank. The software processes $ 5 billion in loans per day and in 2020 its white-label front-end technology was used to process $ 1.4 trillion in mortgage and consumer loans, nearly three times more than the previous year . Its staff has grown to 750 this year, up from 425 before the pandemic.
Although it started out with mortgages, the company has expanded its product offering since 2019 to include home insurance, as well as home equity and auto loans. In March, it agreed to acquire title insurance and settlement company Title365 for $ 422 million, with the goal of further integrating the home closing process into its services and collecting fees for it. insurance.
According to its documents, the startup is well positioned to take advantage of the transition to digitization in the financial services industry, which has only been accelerated by the Covid-19 pandemic. By the end of last year, 13.6 million mortgages worth $ 4.3 trillion had been closed across the country, breaking the previous record of $ 3.7 trillion in 2003.
Blend reported a 166% increase in transactions on its platform from March 2020 to year-end compared to 2019. The company also reported a net loss of $ 75 million on revenue of $ 96 million. dollars in 2020, compared to a loss of $ 81. million dollars on revenues of $ 51 million the previous year.
Ghamsari is also set to earn a big payout – $ 10.9 billion according to Forbes calculations – if the company’s shares soar in the years after its IPO and hit every incentive reward outlined in its compensation deal. Blend’s board of directors has granted Ghamsari a total of 78.2 million stock options with an exercise price of $ 2.86 per share which vest over a period of 10 years, depending on the performance of the action.
“In 10 years, finance will be truly digital and proactive in real time,” says Ghamsari. “(Blend) will be one of the biggest companies in the world.”
Blend stands out this year Forbes’ Fintech 50, which celebrates private startups transforming financial services. Including Blend, at least four members of Fintech 50 2021 are planning to register on the public markets.
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