Blend Labs registered with the Securities and Exchange Commission for getting a confidential registration statement. This indicates a wish to enter the public markets.
The dropping of the S-1 is immediately followed by the mortgage tech firm’s big capital venture. It got a fund of $300 million in a Series G round from Tiger Global Management and a few others as well. A $3.3 billion valuation was given to Blend in this round. Crunchbase suggests it was able to raise an overall of $655 million since its foundation in 2012.
Blend was one of the names among HousingWire’s 2021 Tech 100 winners. It made continuous progress and became a reputed name in the mortgage industry. White label technology of Blend is used by mortgage applications on banks’ sites like Wells Fargo and the U.S. Bank. It also collaborated with CoreLogic in 2019 to provide an easier access line to borrowers’ credit.
Nima Ghamsari, the CEO, and Tim Mayopoulos, the President of the company, declared that the company had a great year in 2020. This was so because more than 300 consumer banks used their technology to process more than $4 billion of mortgages and other consumer loans every day. According to Blend, $1.4 trillion in mortgages and other loans were seen by its technology platforms in 2020.
Recently, digital lending software is becoming a part of other businesses as well. This March, buying of Tile365 was announced by it. Tile365 will be bought from Mr. Cooper Group for about $422 million.
Although, there was hardly any revelation about its upcoming IPO plans by Blend’s S-1, no notice was taken of how many shares would be sold or revelations about the price variation. Neither was there any statement made about the stock exchange it would be listing itself nor was there any mentioning about what ticker symbol would be. The time of its public appearance is still not revealed.
But Blend going public has become quite a news item on the market. Last week, Better.com, a digital mortgage lender, got $500 million from SoftBank. This indicated the starting of an IPO. The lender, led by Vishal Garg, now has an approximate value of $6 billion. Wall Street Journal first published the $500 million investment report. The report said SoftBank bought some existing shareholders, and all of its voting rights will be handed over to Garg.
Doma, which is title insurance SoFi, a digital lender, hopes to go public this year. They have a worth of $3 billion and $9 billion, respectively.
If all those firms can make it an IPO, this clearly shows that the public markets have a massive crave for digital mortgage lenders or platforms compared to more conventional mortgage players.
The traditional mortgage lenders who went public over the previous year were not embraced with an open heart by the public markets. Few companies that remained mostly leveled or even fell are LoanDepot, Guild Holdings, United Wholesale Mortgage, Rocket Companies, and others.
There were some who could not make it for it. The private equity owners of Caliber Home Loans and AmeriHome and wanted to take lenders public last year. However, IPOs were canceled by both. Rather, the lenders had to be sold in private deals. New Residential Investment Corp will buy Caliber with the publicly-traded mortgage originator and servicer for approximately $1.8 billion. Western Alliance Bank bought AmeriHome for approx $1 billion.