Better.com is a digital platform that facilitates real estate transactions. The company, founded in 2016, provides access to a digital platform that provides insurance services for mortgages, real estate, legal status and homeowners themselves. Long-term rentals are still in vogue, but many Americans dream of owning their own residential property. The housing boom fueled by the pandemic has begun to subside, but prices are up more than 23% over the year and are likely to continue to rise next year amid the Fed's ultra-soft monetary policy and new Covid threats. People still need to buy homes, and this is where Better.com comes to the rescue, with a mission to make the journey to home ownership more comfortable through insurance solutions.
Better.com offers fairly standard products like mortgage insurance, but the platform uses computer algorithms and artificial intelligence to lower costs for potential home buyers. By keeping the entire process online, Better.com is able to offer clients mortgage approvals faster and with much lower fees compared to other mortgage brokers. Better.com claims that through its innovative platform, the company can cut the standard time it takes to close a home purchase in half from 42 days to 21 days.
Better.com launched Better Real Estate in 2018, and Better Settlement Services and Better Cover in 2019. Better Real Estate differs from traditional real estate business models in that it is a “partner, not a seller” whose mission is to find the right property for the client. Better Mortgage offers a variety of mortgages in both fixed and floating rate. Better Cover is a division of the company that helps buyers get a complete list of insurance solutions.
Better.com made it onto CNBC's annual Disruptor 50 list, ranking 15th in 2020. The company's services are currently available in 47 states and the company says it is working to expand its geographic presence in all US states. Better.com has received several outstanding awards since its inception, such as Nerdwallet's Best Mortgage Refinancing Company in 2021, LinkedIn's Best Startup in 2020, and One of Forbes's Top Mortgage Lenders in 2021.
In seven years, Better.com has raised $ 905 million in ten investment rounds. During the Series D investment round, which took place in November 2020, the company raised $ 200 million. In April 2021, SoftBank acquired the company's shares in the volume of $ 500 million. The purchase price of the shares was not disclosed, so it is not possible to evaluate the company. Later it became known that Better.com plans to go public through a SPAC deal. The subject of the merger will be Aurora Acquisitions Corp., which was listed in March this year with a valuation of $ 220 million under the ticker AURCU.
During Better.com's IPO, SoftBank's subsidiary SB Management Limited intends to invest $ 1.5 billion in the combined company, which will be channeled into equity (PIPE) Better.com. Following the completion of the merger, Better.com's senior management is expected to remain in office. After the merger, the management of the company expects a valuation of Better.com at $ 7.7 billion. The management of Better.com predicts that by 2023 the company will have annual profit of $ 1 billion on revenues of $ 5.1 billion. The exact date of the IPO of Better.com has not yet been set. however, it is very likely that the deal could be closed as early as Q4 2021. According to HousingWire, if Better.com is valued at $ 7.7 billion after the merger, it will become the third largest non-bank mortgage company in the United States after Rocket Mortgage and United Wholesale Mortgage.