Figure Technologies, co-founded by student loan refinancing company SoFi’s Mike Cagney, is attracting investors as it seeks to reignite interest in home equity loans that fell out of favor after the 2008 financial crisis.
The San Francisco startup, which provides mortgage refinancing and home equity loans, has already secured $53 million in Series C funds from undisclosed investors, with the aim of raising $103 million, according to the company’s SEC filings. The latest funding came after a $80 million series B in February led by RPM Ventures and DST Global and $55 million early stage funding last May led by Ribbit Capital and DCM Ventures.
Homeowners have refrained from borrowing against their property since the financial crisis, with the number of home equity lines about half what it was at the time of the crisis, according to Bloomberg. An important source of revenue for banks, home equity lines of credit, which were seen as so safe during the housing bubble that they were known as “piggy bank” mortgages, now make up less than 2% of banking assets, compared with 5% in 2009, according to a report from Federal Deposit Insurance Corp.
An increase in the availability of personal loans also has pulled borrowers away from those credit lines also known as HELOCs. Venture capitalists have invested $1.51 billion in 21 startups focusing on personal loans in the U.S. this year.
- Figure also has access to $1 billion in asset-based debt from investment bank Jefferies Finance and WSFS Finance in May, according to PitchBook.
- Figure promises an easy online application process and approval time as short as five minutes, leveraging its own blockchain platform Provenance.
- Cagney founded Figure in 2018 with wife June Ou, who is also company COO. Figure also also has a student loan refinance product.
- The only other home equity loan solution company funded after the crisis is Austin, Texas-based Lendwell, which was acquired for an undisclosed amount of money by fintech company CBANC, according to PitchBook.
- SoFi’s $500 million fundraising announced in February was tied for this year’s biggest U.S. fintech fundraising, according to PitchBook data.