Better Holdco, Inc. (Better or Better.com) is an American company which operates an online platform for

mortgage origination In consumer lending, mortgage origination, a specialized subset of loan origination, is the process by which a lender works with a borrower to complete a mortgage transaction, resulting in a mortgage loan. A mortgage loan is a loan in which pr ...

and related services. Founded in 2014 by chief executive officer Vishal Garg, the company launched its first business, Better Mortgage, in 2016 and later added subsidiaries dedicated to real estate,

title A title is one or more words used before or after a person's name, in certain contexts. It may signify either generation, an official position, or a professional or academic qualification. In some languages, titles may be inserted between the f ...

and

homeowners' insurance Home insurance, also commonly called homeowner's insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insura ...

services. The company is backed by

SoftBank is a Japanese multinational conglomerate holding company headquartered in Minato, Tokyo which focuses on investment management. The Group primarily invests in companies operating in technology, energy, and financial sectors. It also runs the ...

and Novator, and in 2020 it secured a US$4 billion valuation. The company is headquartered at 3 World Trade Center in

Lower Manhattan Lower Manhattan (also known as Downtown Manhattan or Downtown New York) is the southernmost part of Manhattan, the central borough for business, culture, and government in New York City, which is the most populated city in the United States with ...

History

Incorporation and growth

In 2014 Vishal Garg incorporated Better as "Better Holdco, Inc." In an interview, Garg said that he and his wife had a negative experience obtaining a mortgage to buy their own first home, which led directly to the company's formation. In 2016 the company launched Better Mortgage and secured $30 million in

Series A funding A series A round (also known as series A financing or series A investment) is the name typically given to a company's first significant round of venture capital financing. The name refers to the class of preferred stock sold to investors in exchan ...

. The company was approved the same year to be a

Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...

seller/servicer. Better raised Series B funding in the amount of $15 million in 2017 with

Kleiner Perkins Kleiner Perkins, formerly Kleiner Perkins Caufield & Byers (KPCB), is an American venture capital firm which specializes in investing in incubation, early stage and growth companies. Since its founding in 1972, the firm has backed entrepreneurs ...

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...

, and Pine Brook Partners. The company launched two additional subsidiaries in 2018; Better Real Estate and Better Settlement Services. A year later, the company launched a fourth subsidiary, Better Cover, and raised $160 million in Series C funding led by Activant Capital. In April, Ally Home announced they were partnering with Better.com to launch their own digital mortgage platform. Ally also made a contribution to the Series C round. The company raised Series D funding of $200 million, led by

L Catterton L Catterton is a U.S.-headquartered private equity firm. Since 1989, the firm has made more than 250 investments in brands across all segments of the consumer industry. L Catterton is led by its co-Chief Executive Officers, J. Michael Chu and S ...

, in 2020. In April 2021, the company raised an additional $500 million from Japanese investment conglomerate SoftBank, resulting in a $6 billion valuation. Better Holdco gained high profile coverage for its quick rise and practices. The number of people from traditionally

underrepresented groups An underrepresented group describes a subset of a population that holds a smaller percentage within a significant subgroup than the subset holds in the general population. Specific characteristics of an underrepresented group vary depending on the ...

buying homes through Better's mortgage lending platform increased significantly in 2019, a development that ''The New York Times'' suggested was linked to the company's digital processes and minimal reliance on human brokers. In May 2021, Better announced that it planned to go public via a SPAC merger with Aurora Acquisition Corp before the end of 2021. Later that same year, Better acquired Trussle, a UK digital mortgage broker, and in September 2021 it acquired Property Partner, a London-based crowdfunding platform. In November 2021, the company formed a new agreement with backers Aurora Acquisition Corp. and SoftBank, and received thereby a $750M cash infusion. In August 2022, Better.com's deadline to go public via a SPAC was delayed until March 2023.

Layoffs and controversy

On December 6, 2021, a video of Garg laying off 900 employees by

videoconference Videotelephony, also known as videoconferencing and video teleconferencing, is the two-way or multipoint reception and transmission of audio signal, audio and video signals by people in different locations for Real-time, real time communication. ...

and locking out their devices became widely disseminated. After much criticism, Garg decided to take time off from the company, but returned in January 2022. In March 2022, news reports surfaced that some Better.com employees started receiving severance pay before Better.com told them they were to be laid off. On March 8, 2022, the company announced that 3,000 people, or approximately one-third of their employees, were laid off in an effort to streamline their business operations. In June 2022, a former senior executive at Better filed a lawsuit alleging that the company misled investors in its financial filings and other representations while it tried to go public. Not long afterwards, three of its senior executives left the company. In August 2022, a list of 250 or more US-based employees who were about to be terminated in a fourth round of layoffs was leaked internally, apparently leading to the termination of the employees who leaked the information.

Operations

Better sells mortgages to about 30 secondary mortgage investors, including

and

Wells Fargo Wells Fargo & Company is an American multinational financial services company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and intern ...

. The company obtains

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from

personal finance Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. When planning personal fi ...

companies such as

Credit Karma Credit Karma is an American multinational personal finance company founded in 2007, which has been a brand of Intuit since December 2020. It is best known as a free credit and financial management platform, but its features also include monitor ...

and

NerdWallet NerdWallet is an American personal finance company, founded in 2009 by Tim Chen and Jacob Gibson. It has a website and app that earns money by promoting financial products to its users. History NerdWallet was founded in August 2009 by Tim Chen ...

in order to attract customers and market to them.

References

External Links

* {{US-bank-stub Online financial services companies of the United States