Mortgage lender Better to go public via SPAC merger

Investment giant Softbank has already invested $500M

National /
May.May 11, 2021 10:30 AM
Better.com CEO Vishal Garg (Better.com, iStock)

Better.com CEO Vishal Garg (Better.com, iStock)

 

Mortgage lender Better is looking for a big pay day.

The company plans to go public via a merger with Aurora Acquisition Corp., a special-purpose acquisition company backed by the investment firm Novator Capital, the Wall Street Journal reported. The deal would give Better a pre-money valuation of $7 billion.

The investment giant Softbank put $500 million into Better, which was previously valued at around $6 billion. Aurora — whose leadership team includes Novatar’s CEO Thor Björgólfsson and Net-a-Porter co-founder Arnaud Massenet — could also put in $200 million.

Mortgage lenders have seen a huge boost during the pandemic thanks to low rates and a hot housing market. Last year, Better made over $850 million in revenue and more than $200 million in net profits, the publication reported.

But that activity may be slowing down. The 30-year mortgage rate is starting to rise and competition is growing, narrowing profit margins for lenders.

SPACs have also seen an explosion in popularity in the past year, raising $83 billion across 248 blank-check firms. In the proptech space, a number of companies — including Sonder, SmartRent and Latch — have launched IPOs by merging with blank-check companies.

[WSJ] — Keith Larsen





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