Better.com IPO Is Coming Later in 2021, Get Ready

By

Jul. 6 2021, Published 12:06 p.m. ET

Better.com, a digital platform that provides mortgage, real estate, title, and homeowners insurance, announced this spring its plans to go public later in 2021. The firm is centered around Better.com’s goal of making homeownership simpler, faster, and more accessible to all Americans.

Article continues below advertisement

The Wall Street Journal reported that Better.com projected $1 billion in annual profit on $5.1 billion in revenue by 2023. The firm anticipated extending $181 billion in mortgages in the year 2023, which would give it a 5.6 percent market share.

What does Better.com do as a company?

Vishal Garg, the startup’s chief executive, founded the company with the purpose of changing the way mortgages and home buying are set up. He aimed to change the home financing emphasis from benefiting insiders and loan officers to provide a better home buying experience for the consumer.

Article continues below advertisement
bettercom about
Source: Better Twitter

The company started in 2014 but launched in 2016 as Better Mortgage. Currently, the company offers services in mortgage, real estate, title insurance, and homeowners insurance. One feature that home buyers like about Better.com is that its loan officers never receive a commission on their loans (meaning they aren’t incentivized to push buyers into larger loans).

Article continues below advertisement

Also, Better.com enables you to complete your loan application fully online with a personalized rate quote within five seconds and a pre-approval in under three minutes. In 2020, Better.com generated $185 million in net income on $876 million of revenue, according to The Wall Street Journal.

Better.com SPAC IPO

Better.com has elected to pursue a public offering through a SPAC (special purpose acquisition company). In this type of IPO, instead of a traditional IPO, the company merges with a blank-check company. The SPAC has no other business than to find a target company to merge with to take it public.

Article continues below advertisement

Better.com will merge with Aurora Acquisitions Corp, a SPAC backed by Novator Capital. Housing Wire also reported that Novator will invest $200 million in the merged company, and a SoftBank subsidiary will commit to a $1.5 billion investment.

CEO Garg said that the company chose a SPAC because it aligned better with investor interest than a traditional IPO.

Article continues below advertisement

Better.com's valuation, stock price, and ticker symbol

Better.com has raised a total of $905 million so far, according to Crunchbase data. Its seed round took place in 2014. One of its more recent funding rounds included a 2020 Series D for $200 million, which was led by L. Catterton. In April, an additional $500 million was raised through a secondary round led by SoftBank Group.

Better.com logo
Source: Better.com Facebook
Article continues below advertisement

The date, price, and ticker symbol for the company post-merger aren't known yet, although the IPO is expected to happen sometime during the fourth quarter of 2021. A post-merger valuation of $7.7 billion is expected, according to Housing Wire.

The SPAC merger is expected to raise almost $800 million in fresh capital for Better.com. Previous Better customers would be able to buy stock in the company through a direct share-purchase program, according to The Wall Street Journal.

Other public companies in the mortgage-lending space include Rocket, the parent company of Quicken Loans, and United Wholesale Mortgage, which also chose the SPAC route to go public.

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.