New York-based digital lender Better.com announced Wednesday the closing of its business combination with the special purpose acquisition company (SPAC) Aurora Acquisition Corp,, ending a two-year journey to make the business public.
Better HoldCo, Inc. and Aurora are creating Better Home & Finance Holding Company, which will have Class A common stock listed on the Nasdaq under the ticker “BETR” starting Thursday.
The deal will unlock $565 million of fresh capital for an unprofitable company. (Better.com incurred an $89.9 million loss in the first quarter of 2023, per Securities and Exchange Commission (SEC) filings.)
The capital infusion includes a $528 million convertible note from affiliates of SoftBank and additional common equity from funds affiliated with NaMa Capital (formerly Novator Capital).
Vishal Garg, Better.com’s CEO and founder, said in a statement that Better.com’s “journey is far from complete,” and the company will “continue pushing the boundaries of innovation in homeownership for our customers and shareholders.”
Garg will be a director at Better Home & Finance, the same position as Prabhu Narasimhan and Arnaud Massenet, managing partners of NaMa Capital. Meanwhile, Harit Talwar will be the chairman of the board of directors at Better Home & Finance.
“Over the past two years, Aurora has worked to deliver over $1.3 billion to Better’s balance sheet,” Massenet said in a statement.
Since the deal announcement, Better’s employment count dropped from 11,000 employees in 2020 to 950 workers as of June 2023. Better faced the deterioration of the mortgage market due to surging rates. It also dealt with the bad press after Garg laid off employees via Zoom in December 2020.
In an interview with HousingWire, Garg said the company has shifted its strategy ahead of its IPO. Better plans to be a mortgage marketplace that sells its technology platform to other companies.
“Our overall model has changed from being a one-stop-shop, where we do everything in-house, to being a one-stop-shop where we do the things in-house that we’re the best at,” Garg said.
“For things like homeowner’s insurance, title insurance, and realtors, we’ve now just become a marketplace. We match the consumer to the product with a partner capable of delivering the best product to them.”
Better partnered with Palantir to create the proprietary loan platform Tinman Marketplace in August 2022.
In January 2023, Better announced a One-Day Mortgage. The product allows customers to go online, get pre-approved, lock their rate and get a binding mortgage commitment letter from Better Mortgage within 24 hours.
Better claims that it funded more than $100 billion in mortgage volume in six years since launch.