Finally, Positive Press for Mortgage Provider Better.com as it Goes Public via SPAC Merger

The U.S.-based mortgage provider Better.com is set to debut on NASDAQ as early as this week after entering a merger deal with Aurora Acquisition Corp, a Special Purposes Acquisition Company (SPAC).

The deal is worth a reported $550M and will inject up to $750M into the new public company, which will be called Better Home & Finance Holding Company.

Better, founded in 2014, operates in all 50 U.S. states as well as the UK, offering a suite of products from residential mortgages to insurance and real estate services, including a One-Day Mortgage offer introduced in January 2023.

Since 2019, Better has funded more than $100Bn in mortgages via its proprietary loan platform Tinman Marketplace.

It has also funded more than $4Bn in real estate transaction volume and provided over $35Bn in cumulative coverage through Better Cover and Better Settlement Services, the insurance divisions of Better.com.

The IPO is a welcome break for Better, which is struggling (like many others) in a dormant U.S. housing market. The company posted net losses of $889M in 2022 and $89.9 million in Q1 2023, funding 2,347 loans in the same period, an 87% decline year-on-year.

The firm has previously ranked as LinkedIn's #1 Top Startup in 2021 and 2020, was #1 on Fortune's Best Small and Medium Workplaces in New York, and was listed on Forbes FinTech 50 in 2020.

But it has gained notoriety for aggressive layoffs since December 2021, including a viral video of CEO Vishal Garg firing 900 members of staff on a three-minute Zoom call—a controversial decision that drove three executives to resign when Garg blamed his employees' lack of productivity as a contributing factor to the mass redundancies.

Better has cut more than 90% of staff since, with the new look workforce consisting of circa 950 employees, down from over 10,000 in Q4 2021. In June of this year, it shuttered its subsidiary Better Real Estate LLC (launched 2021) in favour of partnering with outside agents as referral partners, resulting in another mass layoff of agents.

A further controversy surrounding Better emerged last year when a former executive accused Garg of intentionally misleading investors ahead of the company's deal with Aurora ahead of flotation.

Sarah Pierce, ex-VP for Customer Experience, filed a lawsuit against Better (and Garg, amongst others) for claims including violation of labour laws, defamation and breach of fiduciary duty. However, the SEC opted against recommending any enforcement actions against Aurora or Better, which allowed the SPAC deal to go through as previously planned.