Detroit-based platform Rocket Companies, the parent of Rocket Mortgage, announced on Monday it is acquiring the personal finance app Truebill for $1.275 billion in cash.
The acquisition, expected to close prior to the end of the year, is a step toward a centralized platform for clients to manage their financial lives, the company said. It’s also a step to diversify as mortgage volume slows.
Founded in 2015, Truebill has reached $50 billion in monthly transaction volume by offering an app to track spending, build budgets and improve credit scores. The deal, which is expected to connect Rocket to 2.5 million Truebill clients, is expected to bring $100 million in annual recurring revenues to Rocket. That compares to Rocket’s $1.3 billion in annualized mortgage servicing fee income.
Jay Farner, CEO of Rocket Companies, said in a statement that Truebill provides an intuitive experience to help its clients save money, a perfect fit for the Rocket platform.
The holding businesses include Rocket Mortgage, Rocket Homes, and Rocket Auto. Rocket generated $1.4 billion in net income in the third quarter in the mortgage industry, up from $1 billion the previous quarter. It also originated $88 billion in mortgages in the same period and projects it will reach 10% market share in 2022.
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Farner said that Truebill “follows the same philosophy as Rocket Companies – leveraging the power of technology to remove the friction from complex transactions – and applies it to everyday life.”
Truebill was originally a subscription cancelation app but the company expanded its services. It now helps customers renegotiate bills, such as cable and telephone, with a 20% discount and the company says It has saved $100 million for its clients since its foundation.
“By joining forces with the Rocket fintech powerhouse, we will be able to extend our reach and seamlessly connect consumers with even more services,” Haroon Mokhtarzada, co-founder and CEO of Truebill, said in a statement.