Digital Mortgage Lender Better.com plans to become a public company by the end of August.
This firm announced a merger with Aurora Acquisition Corp., a special purpose acquisition company (SPAC). The digital lender also stated that it plans to become a public firm around August 23.
Better.com for the first time, announced plans to enter the stock exchange through a $6 billion SPAC back in 2021. But this listing was postponed and remained an unrealized intention, which, based on the new statements of the digital lender, will very soon become a real action.
Industry observers previously assessed the probability of listing in this case as low. Their position was based on objective facts, including repeated dismissals that occurred over the past two years, resignations of representatives of the company’s management, and a decline in the growth rate in the real estate sector. But the firm still strives to become public even against the background of unfavorable circumstances.
SPACs in the past were considered an IT way to go public. Two years ago, more than 600 companies registered in this format. At the same time, at the end of 2022, in some verticals, prices for SPACs were expressed in single digits.
The listing of the virtual mortgage lender will take place against the backdrop of a decline in the startup sector, which is a record and has a historical character. The volume of venture financing is rapidly decreasing, leaving hundreds of firms without funds that previously did not worry about investments.
The media reports that investors have sharply reduced the scale of cash injections into startups. For this reason, for the fiscal year ending June 30, the volume of investments in technology firms at an early stage of existence decreased by 49%. In the current state of affairs, some venture capital companies have ceased to exist, and a number of other firms of the corresponding profile of activity have been forced to reduce the number of employees. For example, the payment processor Plastiq declared bankruptcy in May after the unsuccessful merger of SPAC. The biotech startup Goldfinch Bio also announced its termination this year due to the fact that it failed to attract investment funds.
Jenny Fielding, managing partner of Everywhere Ventures, predicts that the current trend will be observed over the next 12 months. According to him, the bankruptcy of companies will continue and significantly increase in scale.
Better.com was founded as a kind of reaction and conclusion of the company’s CEO Vishal Garg after an unsuccessful experience related to an attempt to purchase housing. The head of the firm and his wife could not become the owners of their dream home after a week of phone calls and mailing mortgage documents by mail. Another buyer with money on hand was ahead of them, having managed to complete the transaction for the purchase of the property in a short time. Vishala Garga says that this experience, which remained in his memory as a negative memory, prompted him to create a mortgage process that ensures a high level of competitiveness for the borrower in the seller’s market.
Ziggy Johnson, head of the company’s financial products department, says that currently the practice of using technology greatly simplifies the process of finding a home and makes buying more convenient. According to him, the most accessible way of digital financing in the foreseeable future will be the key to success for firms operating in the field of mortgage lending.
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