Better.com lands $500M investment from SoftBank

UPDATED, April 8, 2021, 3:20 p.m.: Mortgage lending startup Better.com’s valuation just swelled to $6 billion thanks to a recent investment.

Masayoshi Son’s SoftBank, which is known for its big bets on tech companies, is pouring $500 million in the company to buy shares from existing investors, the Wall Street Journal reported.

Better was valued at $4 billion after raising $200 million in November 2020. The company launched in 2014 as a way to streamline mortgage origination by pre-approving borrowers and lowering costs.

Similar to other startups that aim to streamline the homebuying process, Better has benefited from a booming housing market. Sources told the Journal that the company had $800 million in revenue last year. It also hired bankers for a potential IPO.

Through its Vision Fund, SoftBank has invested in many real estate startups that have since gone public. Residential brokerage Compass made its stock market debut this month. Flex-office provider WeWork has plans to go public through a merger with a blank-check company this year. And iBuyer Opendoor merged with Chamath Palihapitiya’s special-purpose acquisition company to go public last year.

Better is expected to go public by the end of the year, according to the Journal.

Last year, the company’s CEO, Vishal Garg, was accused of mismanaging investor funds and creating a hostile work environment at Better, according to Forbes. A lawsuit brought by Goldman Sachs accused Garg of “flagrant self-dealing” before it was ultimately dropped.

SoftBank agreed to give Garg all of the company’s voting rights as part of its investment.

[WSJ] — E.B. Solomont

Update: This story was updated to specify that SoftBank is buying out Better’s existing shareholders.