Blend, which has developed a digital lending platform, announced Wednesday morning that it has closed on a massive $300 million Series G funding round at a valuation of $3.3 billion.
A few things about this news caught our eye. For one, the company closed on this latest round just five months after its $75 million Series F, quadrupling in terms of dollars.
Blend also nearly doubled its valuation during the same five-month period – an impressive feat considering it only reached unicorn status in August 2020. Also, two large global investors participated in the Series G – Coatue and Tiger Global Management, which is a validation of sorts that the company must be doing something right.
The $300 million Series G brings Blend’s total raised since its 2012 inception to $665 million.
Some context
Blend has steadily grown to be a powerhouse in the mortgage tech industry, facilitating $1.4 trillion in mortgages and consumer loans in 2020. The company’s white-label technology is what powers mortgage applications on the site of banks such as Wells Fargo and U.S. Bank with the goal of making the process faster, simpler and more transparent.
In 2020, the San Francisco-based startup significantly expanded its digital consumer lending platform.
With the expansion, Blend began offering its lender customers new configuration capabilities and “support for every major consumer banking product” so they could more quickly and seamlessly meet customers’ needs “from application to close.”
This configurable platform, according to CEO Nima Ghamsari, gives financial institutions such as banks and credit unions a way to launch any consumer banking product “in days rather than months.” It offers product templates, “no-code” drag-and-drop workflows, integrated data services, and control over design elements.
Also during 2020, Blend increased its headcount by 60% to about 560 employees.
On the mortgage front, Blend said it added a number of key customers in 2020, expanding coverage to approximately 30% of all U.S. mortgage volume with the addition of TCF National Bank, FirstBank, Evergreen Home Loans, and Idaho Central Credit Union.
Meanwhile, City Bank and Credit Union 1 were among the financial institutions that selected Blend’s new suite of consumer banking products. And, more than 70 lenders have worked with Blend on digital closings.
I talked with Blend CFO Marc Greenberg and asked him if an initial public offering was in the works this year.
His answer? It’s something the company is considering at some point.
“We are always considering what is best for our business and our stakeholders, including our employees, customers, and partners,” he said. “If we keep building our business and delivering value to the financial services ecosystem, we believe that many options will be available to us in the future, including potentially an IPO.”
He added that Blend was not necessarily looking to raise so much capital so soon after its last round.
“We see what’s happening in the markets, and believe this was the right opportunity. And when the right partners are there, we want to take advantage of that and double down on product areas,” Greenberg told FinLedger. “We’re in a super solid position financially and continuing to grow. But we want to be able to keep investing in our people and products, and increased digitization.”
Today, Blend’s platform enables over 270 lenders to digitally process and close mortgages and consumer loans, open deposit accounts, and secure homeowners insurance, among other things.
Looking ahead, Greenberg said the vision of CEO Ghamsari for Blend goes beyond short-term revenue gain.
“He knows that banks change technology very, very intentionally and that banks are very compliance-driven. They’re methodical and thoughtful and slow,” he said. “That’s part of the reason I think there is not a lot of great technology for banks. And so to have someone who’s patient and willing to be the long-term technology stack for banks is just powerful.”
The company plans to use its new capital to fuel its “next phase of growth” and invest in its products and services.
Investor POV
Coatue Managing Partner Kris Fredrickson points out that 2020 was a “big year of change for the banking industry.”
“Stay at home orders and social distancing mandates accelerated digital adoption faster than anyone could have expected,” he added in a written statement. “Blend has been at the forefront of this revolution, helping banks rapidly meet the changing needs of their customers.”
John Curtius, a partner at Tiger Global Management, said in a written statement that consumers today “expect Amazon-like experiences across the board.”
“Blend is well-positioned to help financial institutions achieve that,” he said.