Mike Cagney’s Figure Technologies laid off 20% of its staff and plans to take its profitable lending business public next year, Bloomberg reported.
About half of the workers laid off last week were engineers and this was the first round of staff reductions for the company, according to the outlet.
”Last Friday I found out I was part of the latest round of layoffs in a company where I truly felt I had belonged and it was jarring to say the least,” a former solutions architect at Figure said in a LinkedIn post.
Figure declined to comment for the story.
The layoff came as a surprise to many as Figure has been hitting financial milestones.
Figures’ lending business hit a record $900 million in origination and generated $2.7 million in adjusted profit in the second quarter of 2023. In the first half of the year, the company posted $83.5 million in revenue, according to a letter from Cagney to investors and partners in July.
Figure’s profitable lending business — with more than a 50% contribution margin — prompted executives to begin talks with bankers to take its lending division LendCo public in early 2024, per Bloomberg which cited documentation of Cagney’s comment in a meeting.
Cagney expects to land a $2.5 billion public valuation for LendCo when it goes public.
That market capitalization, along with the company’s other assets “should put us comfortably ahead of last round price” Cageny said, referring to Figure’s latest $3.2 billion valuation in a venture-backed funding round in 2021.
Founded in 2018 by Cagney, the former head of SoFi, Figure uses proprietary platform Provenance Blockchain for loan origination, equity management, private fund services, banking and payments.
Figure planned to go public with special purpose acquisition company (SPAC) Figure Acquisition Corp. in 2022 but was scrapped with the blank check company getting delisted from the New York Stock Exchange.
The company also announced its intention to merge with Homebridge Financial Services in 2022 but that also failed to materialize due to regulatory delays.
Originators can use Figure’s online pre-application process to pre-qualify their customers, which then feeds directly to a digital fulfillment system supported by Figure.
The company also started collaborating with four independent mortgage banks — CMG Financial, CrossCountry Mortgage, Fairway Independent Mortgage and The Loan Store — as private-label partners this month.
Figure recently eclipsed over $6 billion in HELOC originations, according to the company.