Better.com

Last updated

Better Home & Finance Holding Company
Company type Public
Nasdaq:  BETR
Industry Financial services
FoundedFebruary 24, 2014;10 years ago (2014-02-24)
Founder Vishal Garg
Headquarters 3 World Trade Center, New York City, US
Key people
  • Vishal Garg (CEO)
  • Paula Tuffin (CCO)
  • Kevin Ryan (CFO)
Services Broker for mortgage origination, title insurance, and home insurance
RevenueDecrease2.svg $51 million (1H 2023)
Increase2.svg -$135 million (1H 2023)
Total assets Decrease2.svg $926 million (2023)
Total equity Decrease2.svg -$732 million (2023)
OwnerVishal Garg (16%)
Activant Capital Group (10.1%)
SoftBank Vision Fund (9.1%)
Riaz Valani (8.7%)
Pine Brook Capital (8.2%)
Michael Farello (3.8%)
Novator Partners (2.5%)
Nicholas Calamari (1.6%)
Website better.com
Footnotes /references
[1] [2] [3]

Better Home & Finance Holding Company doing business as Better or Better.com, headquartered in New York City, provides mortgage origination and related services such as title insurance and home insurance online in the United States and United Kingdom. [4]

Contents

Its largest source of business is an integrated relationship with Ally Financial, by which Better sells, processes, underwrites and closes Ally's mortgages, while Ally retains control of marketing, advertising and loan pricing. [5] Better sells mortgages to approximately 30 secondary mortgage market investors, including Fannie Mae and Wells Fargo. The company secures lead generation from personal finance companies such as American Express, Credit Karma and NerdWallet. [6] [5]

History

In February 2014, Vishal Garg founded the company after he and his wife had a negative experience obtaining a mortgage to buy their first home. [7]

In 2016, the company launched Better Mortgage and was approved to be a Fannie Mae seller/servicer. [8]

In April 2019, the company partnered with Ally Financial to operate its mortgage platform. [9] The number of people from traditionally underrepresented groups buying homes through Better's mortgage lending platform increased significantly in 2019, a development that The New York Times suggested was linked to the company's digital processes and minimal reliance on human brokers. [6] [10]

In July 2021, Better acquired Trussle, a UK digital mortgage broker, for $9 million. [11] In September 2021, Better acquired Property Partner, a London-based crowdfunding platform. [12]

In May 2022, Harit Talwar was hired as chairperson. [13]

In February 2023, the company announced a deal with Amazon whereby Amazon employees are able to pledge their stock as collateral for a loan to cover the down payment on a house purchase, albeit at a slightly higher interest rate. [14] In August 2023, the company became a public company via a merger with a special-purpose acquisition company that included an investment from SoftBank Vision Fund; shares plummeted immediately after the SPAC merger. [15] [16] [17] The company was valued at $7.7 billion. [18]

Layoffs and controversy

In December 2021, Garg laid off 900 employees by videoconference and locked their electronic devices from accessing company material. [19] [20] [21] [22] [18] Garg also made comments to employees that were deemed "unruly", telling employees that he "hired the wrong people" and referring to employees as "slow," "dumb," and "embarrassing". [23] After much criticism, Garg took approximately a month off, returning in January 2022. [24] [25] [26]

On March 8, 2022, the company announced that an additional 3,000 people, or approximately one-third of employees, were laid off. [8] [27] [28] Some employees learned of their layoff when they received severance pay, before Better.com told them they were to be laid off. [29]

The company instituted another round of layoffs in April 2023; in this round, affected employees received individual calls, a severance package that included a minimum of 60 days compensation, up to three months of health coverage through COBRA, and assistance in their job searches. [30]

In June 2022, Sarah Pierce, a former senior executive at Better, filed a lawsuit alleging that the company misled investors in its financial filings. The company said that the suit was without merit but it prompted an investigation by the US SEC. [31] In August 2023, the SEC concluded its investigation recommending no enforcement action against Better. [32] As of April 2024, Better won a judgment against Pierce and her complaint was voluntarily dismissed with prejudice. [33]

Also in June 2022, the company also closed its real estate brokerage unit, laying off all staff. [34] [35] The company had 150 agents as of 2021 and received 20% of agents' commissions in exchange for lead generation. [36]

That month, three senior executives left the company. [37]

In August 2022, a list of 250 or more US-based employees who were about to be terminated in another round of layoffs was leaked internally, leading to the termination of the employees who leaked the information. [38]

In 2023, Garg laid off more employees and had more job cuts resulting in shutting down the real estate team and the unit. As per midea reports, the company laid off a total of 4000 employees since December 2021. [39]

Awards and recognition

The company has received the following awards and recognition: [15]

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References

  1. ↑ "FORM 8-K". U.S. Securities and Exchange Commission. August 22, 2023.
  2. ↑ "BETTER'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS". U.S. Securities and Exchange Commission.
  3. ↑ "Department of State: Division of Corporations". Delaware .
  4. ↑ Agostini Ferrer, Andrea (October 11, 2022). "Better Mortgage Review". Money .
  5. 1 2 CARTER, MATT (August 29, 2023). "Nearly half of Better's mortgage business now comes from partners". Bradley Inman .
  6. 1 2 Miller, Jennifer (September 18, 2020). "Is an Algorithm Less Racist Than a Loan Officer?" . The New York Times .
  7. ↑ Howley, Kathleen (August 19, 2019). "Digital mortgage company Better.com closes $160 million in funding". HousingWire.
  8. 1 2 Aryan, Aashish; Mukul, Pranav (December 7, 2021). "Explained: Better.com, the mortgage company that fired over 900 employees over Zoom call". The Indian Express .
  9. ↑ "Ally Financial Partners with Better.com to Create End-to-End Digital Mortgage Experience" (Press release). PR Newswire. April 18, 2019.
  10. ↑ Jeans, David (November 20, 2020). "Mortgages, Fraud Claims And 'Dumb Dolphins': A Tangled Past Haunts Better.com CEO Vishal Garg" . Forbes .
  11. ↑ de León, Riley (July 12, 2021). "Digital mortgage lender Better acquiring Goldman Sachs-backed fintech ahead of public listing". CNBC .
  12. ↑ Lawler, Ryan (September 9, 2021). "Better.com acquires UK-based Property Partner ahead of SPAC close". TechCrunch .
  13. ↑ Reyes, Max (May 9, 2022). "Better Hires Ex-Goldman Partner Talwar With Eyes on Listing" . Bloomberg News .
  14. ↑ Mattioli, Dana (February 28, 2023). "Amazon Employees Will Be Able to Use Stock as Collateral for Home Loans" . The Wall Street Journal .
  15. 1 2 "Better Home & Finance Announces Closing of Business Combination" (Press release). Business Wire. August 23, 2023.
  16. ↑ Azevedo, Mary Ann; Hall, Christine (August 27, 2023). "Better.com's public market debut was Miserable.com". TechCrunch .
  17. ↑ Azevedo, Mary Ann (August 11, 2023). "It's official: Better.com is going public". TechCrunch .
  18. 1 2 Jeans, David. "Better.com CEO Who Fired 900 People On Zoom Is Struggling To Keep His Company Afloat". Forbes . Retrieved January 6, 2024.
  19. ↑ Maruf, Ramishah (December 5, 2021). "Better.com CEO fires 900 employees over Zoom". CNN .
  20. ↑ Timmins, Beth (December 7, 2021). "Vishal Garg: US boss fires 900 employees over Zoom". BBC News .
  21. ↑ Tan, Kwan Wei Kevin (August 24, 2023). "CEO who fired hundreds on Zoom call say he's worked hard to be kinder". Business Insider .
  22. ↑ Graziosi, Graig (December 6, 2021). "Who is Vishal Garg, the CEO that fired 900 employees over Zoom call?". The Independent . Archived from the original on December 6, 2021.
  23. ↑ MATHEWS, JESSICA (December 6, 2021). "Better.com's morale and SPAC merger success in question after CEO's unruly comments" . Fortune .
  24. ↑ Goldberg, Emma (December 10, 2021). "Better.com's C.E.O. is 'taking time off' after firing 900 workers over Zoom" . The New York Times .
  25. ↑ Goldberg, Emma (January 18, 2022). "Better.com's founder returns as C.E.O. after firing 900 workers on Zoom" . The New York Times .
  26. ↑ Kirsch, Noah (January 18, 2022). "He's Baaaack! Ax-Wielding Better.com Founder Returns as CEO". The Daily Beast .
  27. ↑ Valinsky, Jordan (March 8, 2022). "Better, after firing 900 employees over Zoom, is laying off 3,000 more workers". CNN .
  28. ↑ Goldberg, Emma (March 8, 2022). "Better.com, a mortgage lender and early pandemic winner, announces more layoffs. The company will let go more than 3,000 employees three months after gaining notoriety for firing 900 workers in a Zoom call" . The New York Times .
  29. ↑ Azevedo, Mary Ann (March 8, 2022). "Better.com employees learned of layoffs when severance checks appeared in payroll app". TechCrunch.
  30. ↑ Goldberg, Emma (April 19, 2022). "Better.com announces more layoffs, citing mortgage market turbulence". The New York Times .
  31. ↑ Pisani, Joseph (July 14, 2022). "SEC Probes Better.com After Lawsuit Alleges Company Misled Investors" . The Wall Street Journal .
  32. ↑ Carter, Matt (August 23, 2023). "After setbacks, Better goes public with plan to scale 'greater heights'". Inman.
  33. ↑ Nunes, Flavia (May 8, 2024). "Former top executive withdraws lawsuit against Better.com and its founder". HousingWire.
  34. ↑ Azevedo, Mary Ann (June 9, 2023). "Better.com lays off real estate team and shutters business unit". TechCrunch .
  35. ↑ CARTER, MATT (June 8, 2023). "Better.com lays off in-house real estate agents nationwide". Bradley Inman .
  36. ↑ "Another round of Better.com layoffs hits in-house agents" . The Real Deal . June 8, 2023.
  37. ↑ Azevedo, Mary Ann (June 21, 2022). "Better.com loses three more senior executives, including SVP and VP of sales". TechCrunch .
  38. ↑ Azevedo, Mary Ann (August 25, 2022). "Better.com conducts fourth layoff in less than 9 months". TechCrunch .
  39. ↑ Staff (June 10, 2023). "Better.com CEO Vishal Garg announces fresh round of layoffs". Mint . Retrieved January 6, 2024.
  40. ↑ Hempel, Jessi (September 22, 2020). "LinkedIn Top Startups 2020: The 50 U.S. companies on the rise". LinkedIn .
  41. ↑ "15. Better.com". CNBC . June 16, 2020.
  42. ↑ "Better Mortgage". Forbes .
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