Seven months after a $16 million Series B round, digital mortgage platform Maxwell has raised $52.5 million in additional funding, the company said on Tuesday.
The latest round was led by Fin VC, the venture capital firm that also led the Series B capital raise. Existing investors TTV Capital, Prudence, and Rotor Capital participated in the round, as well as Wells Fargo Strategic Capital.
A source told Bloomberg that the latest financing – split between $28.5 million in equity and $24 million in debt – valued the company at $450 million.
Tom Richardson, head of strategic capital principal technology investments at Wells Fargo Strategic Capital, said in a statement that the capital “will help them achieve their business goals and continue to expand their product offering.”
Maxwell has raised a total of $73.8 million in the last 16 months. The company, founded in 2015, uses artificial intelligence to streamline and accelerate the mortgage process for community lenders and their borrowers. Community lenders represent 50% of the $4 trillion U.S. mortgage market.
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Maxwell’s premise is that small and midsized lenders have historically struggled to offer cutting-edge technology, scale effectively and hire the talent needed to meet the demand in boom markets.
“Large, online lenders are increasing their market share each year. For local and regional lenders to compete and survive, they need to digitally overhaul and enhance their processes,” John Paasonen, Maxwell’s co-founder and CEO, said in a statement.
Paasonen told Bloomberg that Maxwell has facilitated around $52 billion in loan volume year-to-date in 2021, expects to facilitate about $70 billion, and that more than 70% of the origination volume comes in the form of purchase mortgages. Annualized revenue should approach $100 million in the next 18 months, he told the business publication.
In September, Maxwell launched a trading platform to provide community lenders access to the secondary market, connecting these loan sellers to buyers.
Sadie Gurley, who leads Maxwell Capital, previously told HousingWire that the startup will use its capital to buy loans from community lenders. The company will not own the loans but sell to investors, picking up the spread.
However, because buying and selling mortgages is a capital-intensive business, Maxwell needs to raise more capital to grow the platform.