Better.com weighs options as a private company

Startup’s deadline to go public extended to March 2023

Better.com CEO Vishal Garg (Getty Images, YouTube/vishalgarg)
Better.com CEO Vishal Garg (Getty Images, YouTube/vishalgarg)

Remaining a private company remains firmly on the table for Better.com, which is seeking the best way forward after a tumultuous period for the startup.

The digital mortgage lender has held discussions to remain a private company by landing alternative financing arrangements, according to an SEC filing reported by Inman. If the company finds financing outside of the planned merger with Aurora Acquisition Corp., the SPAC formed to take the company public, its merger agreement would be terminated.

The company has been angling to go public for some time, starting work with Aurora in May 2021. It was set to go public in February before that was delayed to the end of September. The deadline has been delayed again, this time to March 8, 2023.

Without a completed merger by that day, Aurora would be forced to quickly dissolve.

Failing to go public could result in Better leaving big money on the table. SoftBank and Novator Capital has committed up to $750 million through a convertible note at Better’s option, which would need to be exercised within 45 days of the merger’s closing.

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Better’s potential escape from going public comes after a challenging few months for the mortgage lender, to put it lightly. In April, the company made a “substantial cut” to its workforce, the second round of layoffs in as many months. In March, it laid off 3,000 employees in the United States and India, which some learned of after Better rolled out severance payments prematurely.

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From left: Former Better.com executive vice president for sales and operations Sarah Pierce; Better.com CEO Vishal Garg (Better.com, Scott Rosenthal, CC BY-SA 4.0/via Wikimedia Commons, iStock)
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In December, CEO Vishal Garg took a leave of absence after laying off more than 900 employees via Zoom before accusing some of being unproductive and stealing from the company. That incident triggered an internal review and led to the resignation of a number of executives.

The company is also contesting a lawsuit from former executive vice president for sales and operations, Sarah Pierce. She accused the company of misleading investors and forcing her out of her role after raising concerns.

In a statement following the lawsuit filing, Better said the claims in Pierce’s complaint were without merit.

— Holden Walter-Warner