- New York-based digital mortgage lender Better.com is going public.
- The company will combine with Auora Acquisition Corporation via SPAC “on or about August 22.”
- The transaction between Better and Aurora has been more than two years in the making. The companies first announced the deal in May 2021.
Time to party like its 2021? The week begins with news that digital mortgage lender Better.com’s proposal to combine with Aurora Acquisition Corporation via SPAC has secured shareholder approval. The new Better.com will go public “on or about August 22, 2023.”
When finalized, the transaction will provide the combined entity with a minimum of $550 million and as much as $750 million in new capital. The company will trade on the NASDAQ under the tickers “BETR” and “BETRW.”
Founded in 2014 by CEO Vishal Garg, Better has been trying to close its SPAC deal for years. The transaction had been extended three times since 2021, amid concerns over market conditions, financial losses, and regulatory controversies. Among the bad press Better.com dealt with during this stretch was the infamous Zoom meeting in December 2021 during which Garg announced a layoff of approximately 900 employees. The CEO and founder also allegedly admitted that the company has “probably pissed away $200 million.”
With regard to finances, Better.com reported a net loss of $888.8 million in 2022. In the first quarter of this year, the company acknowledged losses of $89.9 million. Better.com also reported a decline in the number of loans funded year-over-year. The firm funded 18,559 loans in Q1 of 2022. Better.com funded 2,347 loans in the first quarter of this year.
In one response to these challenges, the company has made significant changes to its real estate strategy. Better.com announced in June that it would begin partnering with outside agents as referral partners in its Better Real Estate subsidiary. This pivot away from in-house licensed real estate teams to this new model is designed to help the subsidiary lower costs. The company also indicated that the change will help it deal with the challenge of lower mortgage volumes. Better Real Estate, which receives a significant number of its leads from its parent company’s mortgage operation, provided Better.com with $23.1 million in revenue in 2022.
Better has also introduced new solutions along its main line of business. The company began the year with the launch of One Day Mortgage. The new offering f gives borrowers a mortgage commitment letter within 24 hours of applying for a loan.