Today San Francisco-based Figure Technologies announced a $65 million Series B funding round. Figure has received $120 million to date. RPM Ventures and “partners at” DST Global led the round. Other investors include Ribbit Capital, DCM, DCG, Nimble Ventures, Morgan Creek.
“We are encouraged by what we’ve accomplished in our first year, and this investment validates Figure’s market potential,” said Mike Cagney, co-founder and CEO at Figure. “We launched the fastest HELOC [home equity line of credit] in the market, and we originate, finance and sell every one of our loans on the Provenance blockchain, an industry first.”
By fastest Cagney is referring to the turnaround time. Approval can be as little as five minutes with funds in five days. The startup’s flagship product enables homeowners to borrow online against their home’s equity. Since September 2018 the company has advanced 1,500 home equity loans.
The company uses its blockchain for loan origination, finance and sales. It calls its blockchain “Provenance”. However, there is no connection with the older and high profile UK-based startup Provenance known for blockchain product traceability and transparency.
Figure states that by mid-2019 other companies will also start to use the Figure Provenance blockchain for loan origination. It’s also planning to log investment funds on its blockchain network.
Increasingly retirees short of cash take out a reverse mortgage on their houses. But the mortgage company ends up owning part or all of their home in exchange for providing regular payments to provide the retiree with cash to live on.
Figure says it will introduce a “more transparent and straightforward” alternative to reverse mortgages. That will involve retirees selling their homes outright to Figure for cash and staying in place as renters. The company is currently introducing its new product in Texas, Illinois and Nevada.
It’s a novel concept. On the one hand, a retiree could achieve a similar outcome by selling their own home and using the proceeds to take out an annuity. The difference is they get to stay in their home. One concern is if the retiree runs out of cash, perhaps because of medical expenses. Then they won’t be able to afford the rent and could face eviction.
Another big player in mortgages and blockchain is Ranieri Solutions. They’re working with blockchain startup Symbiont to put sub prime mortgages on a blockchain.
Cagney previously cofounded SoFi, known for refinancing student loans. The company raised $2 billion while Cagney was CEO, including $1 billion from SoftBank. Cagney stepped down as CEO after the company was sued relating to sexually harassing behavior of certain staff members.