Now that’s … better.
Digital lending company Better.com has received approval for its unconventional IPO plan, signaling a major step forward for the firm, HousingWire reported.
Shareholders of special purpose acquisition company Aurora Acquisition Corp have voted in favor of the merger proposal, allowing Better.com to go public after a series of challenges.
New York-based Better.com’s IPO journey has been far from typical. After nearly two years of delays from its original timeline, the company is set to go public through a merger with SPAC Aurora Acquisition Corp. The shareholder’s meeting saw resounding support for the proposal, with at least 65% of outstanding ordinary shares voting in favor, as confirmed by Arnaud Massenet, CEO of Aurora Acquisition Corp.
Once the merger is finalized, the combined entity will be infused with $750 million in fresh capital, as outlined in Aurora’s filing with the Securities and Exchange Commission (SEC) in July. This deal’s path has not been smooth, having been extended three times due to unfavorable market conditions, substantial layoffs, financial losses, and a wave of negative publicity.
Better.com, founded in 2014 by CEO Vishal Garg, gained infamy for massive layoffs, including letting go of around 900 employees via Zoom in December 2021. The lender’s workforce reduction reached approximately 91 percent over an 18-month period, according to Aurora’s SEC filings. By June 8, Better.com’s team had dwindled to around 950 members, a sharp drop from its peak of about 10,400 employees in Q4 2021.
The company faced additional hurdles, including an SEC investigation into allegations that CEO Vishal Garg misled investors ahead of the planned SPAC merger. The SEC recently concluded that it does not intend to recommend enforcement action against Better.com. Financially, the digital lender reported a net loss of $888.8 million in 2022 and $89.9 million in Q1 2023, alongside a significant drop in loans funded from 18,559 in Q1 2022 to 2,347 in Q1 2023.
In recent times, Better.com shifted its real estate strategy by partnering with external agents and discontinuing its in-house brokerage subsidiary. According to Inside Mortgage Finance, Better.com ranked as the 59th largest mortgage lender in the United States during the first quarter.
The market response following the shareholder vote was mixed. Aurora’s shares traded at $37.03, marking an 8.77% decline from the previous closing price. However, the share price had previously soared by 530 percent to $62.91 after the SEC declared the SPAC combination effective, reflecting the tumultuous journey of Better.com’s IPO.
— Ted Glanzer