NEW YORK — Better Mortgage, a technology-driven mortgage bank, has closed $15 million in Series B financing from Kleiner Perkins Caufield and Byers, Goldman Sachs, and Pine Brook. The new capital will support the launch and expansion of Better’s home purchase finance product on Better.com.
Since launching in January 2016, Better has funded more than $500 million in loans by tapping into underserved consumer demand for a simpler and more affordable home finance experience.
“We built the best customer experience out there; the one we would want for ourselves, our friends and family,” said Vishal Garg, Founder and CEO of Better. “With over half a billion dollars in loans originated in our first year—more than any other fintech startup in its initial year of launch—consumers have confirmed that we are onto something extraordinary.”
According to Ellie Mae’s December 2016 Originations Insight Report, the average time to close a loan was 50 days and 23% of home purchase applications did not close. The Mortgage Bankers Association cites total loan production expenses of nearly $7,000 in the third quarter of 2016 and a recent report by the former chairperson of the MBA noted that an average closing package numbers 806 pages. Consumers feel the pain; the average Net Promoter Score of the three largest banks in the mortgage business is negative 12. “We could say that the mortgage industry is broken, but the numbers speak for themselves, and almost anyone who has ever dealt with a typical mortgage company as a consumer like we did will tell you pretty much the same —- so rather than just build another website on top of the existing backend process, we fixed it from the ground up and built something that delights consumers and investors,” added Erik Bernhardsson, CTO of Better.
Better eliminates the jargon, complexity and commissions of the traditional mortgage process, and aligns incentives, provides consumers real advice and service, when and where consumers want it. Consumers can get transparent rate quotes in seconds, and get approved and lock a rate in minutes online at Better.com 24 hours a day, 365 days a year, all without ever speaking to a single commissioned mortgage broker. Better takes the thousands of dollars in savings from digitization and passes them onto the consumer, in the form of better rates and better process and service.
“Better is a breakthrough for consumers in the mortgage market,” said Noah Knauf, General Partner at Kleiner Perkins, the venture capital firm that invested in tech greats Amazon and Google. “The next generation of homebuyers will expect a customer experience that none of the current industry players are equipped to deliver, and we’re very excited to join Goldman Sachs and Pine Brook in helping Better transform the market.”