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If you’ve ever applied for a mortgage, you know it’s one of the most painful processes out there. Keeping up with payments and dealing with customer service over the course of the loan is no picnic either.
So it’s no surprise that big bucks are being poured into the space with the goal of making the process easier, more digital and more transparent.
To that end, Valon, a tech-enabled mortgage servicer, announced this morning it has raised $50 million in a Series A round of funding — which is large for its stage even by today’s standards.
Andreessen Horowitz (a16z) led the round for the New York-based company formerly known as Peach Street. Returning backers Jefferies Financial Group, New Residential Investment Corporation – an affiliate of Fortress Investment Group LLC – and 166 2nd LLC also participated in the financing.
Valon previously raised $3.2 million from seed investors such as serial entrepreneur Kevin Ryan’s Alley Corp, Soros, Kairos, and Zigg Capital.
Andrew Wang, Eric Chiang and Jon Hsu founded Valon in June 2019 with the mission of breaking up what it sees as “a monopoly in the market,” with “the largest mortgage servicing software company” (software giant Black Knight) controlling more than half of all U.S. residential loans.
“We’re on the cusp of a mortgage foreclosure crisis comparable to 2008, and the majority of homeowners struggling to make their loan payments are unaware of their options,” Valon CEO Wang said. “This stranglehold has driven servicing costs up nearly 250% in the past decade, and the fees are passed on directly to the borrower.”
Concurrent with the raise, Valon recently got the green light from Fannie Mae to service its government sponsored home loans. (For the unacquainted, servicing loans means doing things like collecting payments on behalf of a lender). The approval will only continue to fuel Valon’s rapid growth, according to Wang.
“We went from no contracts committed to $10 billion in mortgages committed to be serviced in one year,” he told TechCrunch.
Valon operates in 49 states, and expects to add New York this year.
As a former investor in mortgage servicing space, Wang was frustrated by “the lack of service” provided by other servicers. So he teamed up with Chiang and Hsu, who had prior product and engineering experience at Google and Twilio, to launch Valon.
The company’s cloud-native platform aims to deliver what it describes as a borrower-oriented experience. Lenders also can request access to real-time API data feeds to view performance of their borrowers and reconcile transaction data.
Unlike mortgage originators, which lend money to the borrower, a mortgage servicer interfaces with the borrower for the duration of their loan – and that can be anywhere from 15 to 30 years.
“This includes things like collecting payments on behalf of the lender and providing assistance and guidance to the borrower in moments of stress,” Wang said. “Traditional mortgage servicers use antiquated technology and provide poor service to borrowers. Valon looks to change that dynamic by providing transparency and full self-service capabilities to homeowners.”
The company also claims that its technology has the potential to reduce mortgage servicing costs by up to 50% by vertically integrating the entire process. Its platform is built on Google Cloud with security as a “first-principle” with features such as default encryption and intrusion detection, the company said.
Millions of Americans stopped paying their mortgages in 2020 due to the economic strain of the coronavirus pandemic. This led to requests for forbearance (postponement of payments) and foreclosure moratoriums.
“The pandemic highlighted the stress in the market and greatly accelerated the need for a new age mortgage servicer,” Wang said. “Homeowners faced a great deal of financial stress and had difficulty getting the right option and assistance from existing servicers due to their antiquated technology and inability to process requests… In 2021 we will see forbearance and foreclosure leniency come to an end and this need will be even more acute.”
Angela Strange, a general partner at Andreessen Horowitz who joined Valon’s board in mid-2020, says Valon has built a mobile-first mortgage servicer from the ground up.
“Homeowners are faced with clumsy websites, call centers, and often misinformation,” she said in a written statement. “In Valon, they have a trusted software driven advisor who can provide clear, transparent, regulatory compliant information in good times and bad – without needing to pick up the phone.”
The Fannie Mae approval only serves as further validation of the platform the team has created, she added.
Valon plans to use its new capital to triple headcount to about 100 by year’s end as well as to acquire more mortgage servicing rights (MSR) contracts to service.
Atlassian has made it clear for some time that it’s all in on the cloud, but now it’s official. The company stopped selling new on-prem licenses as of yesterday. Perhaps to take away the sting of that move for large organizations, today it announced a new all-inclusive enterprise pricing tier.
Atlassian chief revenue officer Cameron Deatsch says that previously the company had offered a free tier and then standard and premium level paid tiers. “And now this cloud Enterprise Edition will be our highest tier, and what this will allow is for the most complex deployments, the largest customers who need unlimited scale, the customers that have all the security and regulatory requirements, data residency, you name it, — that is what we’re launching starting [today],” Deatsch told me.
What the enterprise tier delivers is unlimited instances across the Atlassian product line for each enterprise customer. That means a big company with multiple divisions could, for instance, have 20 instances of Jira and Trello deployed with one for each division and a central management console, while paying a single price regardless of how much they use.
While the company is supporting existing on-prem customers until 2024, the idea is to now move them to the cloud and this offering should help. One thing we have clearly seen is that the pandemic has accelerated the move to the cloud by companies of every size, and this should encourage the company’s largest customers to make the move.
“The reality is, the demand was there, which was great to see, but we actually had this huge pipeline of our largest customers, basically trying to build their plan over the next couple of years to get to our cloud. The general availability of our Enterprise Edition is going to accelerate that even more,” he said.
It’s a move the company has been working towards for some time, but it really began to take shape when they shifted their operations to AWS and rebuilt the entire stack as a set of microservices beginning in 2016. This was the first step towards being able to handle the increased kinds of workloads an enterprise tier would require.
The company reported earnings at the end of last month with revenue of $501.4 million up 23% YoY with over 11,000 net new subscribers, a record for the company. The new enterprise tier won’t help with new customer volume, but it should help with overall revenue as more customers look for cloud solutions and pricing that meets their needs.
On the heels of private companies Robinhood and Databricks each raising $1 billion or more yesterday, Bumble is out with a new IPO filing this morning indicating that it wants to raise ten figures as well.
The relationship-finding service where women reach out first will go public on the heels of strong public debuts in December by companies like Airbnb, DoorDash and C3.ai and Qualtrics and Poshmark lighting the way in January.
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But at a range of $28 to $30 per share, is Bumble aiming high or low in its valuation and resulting multiples? (For more, check out our first-look at Bumble’s results here.)
Annoyingly, it’s a little tricky to figure out, as the company’s ownership structure and results are messy thanks to a majority-sale to Blackstone back in 2019. So this won’t be entirely clean or simple.
But we’ll get through it. Here’s what we want to know:
- Simple and diluted valuations for Bumble at its current IPO price range
- What sort of multiples Bumble expects public investors to pay for its shares
- How those stack up compared to Match Group’s own numbers
- And, finally, what the Bumble IPO could mean for dating and relationship-focused startups; could this IPO prove that there is lucrative space in the market for more dating products?
So let’s get to work, starting with Bumble’s valuation.
It’s a bird! It’s a plane! It’s a very valuable bee?
Bumble’s simple valuation is just that to calculate, a doddle. At $28 to $30 per share, and Bumble noting that it expects to have 108,384,634 shares outstanding after its IPO, including its full underwriters’ option, the company would be worth $3.03 billion to to $3.25 billion.
But that’s actually a bit too simple. Bumble’s share count is actually quite a lot higher. For example, if we assume the “exchange of all Common Units held by the Pre-IPO Common Unitholders,” then the company’s share count rises to 189,548,952. At that share count, Bumble is worth $5.31 billion to $5.69 billion. That’s a lot more!
Now things get actually tricky. Our last share count did not take into its confines “any shares of Class A common stock issuable in exchange for as-converted Incentive Units or upon settlement of certain other interests.” So, what are those?
Source: https://techcrunch.com/2021/02/02/bumble-ipo-could-raise-more-than-1b-for-dating-service/
Own a Tesla Model S or Model X? It might have a recall, and it’s serious.
Tesla today issued one of its largest recalls to date, covering roughly 135,000 Model S and Model X. The touchscreen is the concern.
According to the National Highway Traffic Safety Administration (NHTSA), the touchscreen in these vehicles can fail when a memory chips runs out of storage capacity, which can cause a host of failures, including affecting turn signals and defrosters, and the rearview camera. This failure can also affect Tesla’s self-driving Autopilot functionality.
The NHTSA explained the department’s findings to Tesla in a mid-January letter. According to NHTSA’s Office of Defects Investigation (ODI), the affected vehicle’s memory chips are to blame. The 8GB chip eventually wears out, and the only remedy is a replacement, the letter says.
According to the WSJ, Tesla disagrees that the issue is a failure, though the automaker is recalling a select amount of vehicles to investigate the issue.
“It is economically, if not technologically, infeasible to expect that such components can or should be designed to last the vehicle’s entire useful life,” Tesla said in the letter.
The vehicles covered by the recall include Model S sedans built between 2012 and 2018 and Model X vehicles made between 2016 and 2018. The affected vehicles are equipped with NVIDIA Tegra 3 computing platforms and an 8GB eMMC NAND flash memory device.
Source: https://techcrunch.com/2021/02/02/tesla-recalls-135000-vehicles-over-touchscreen-failures/
Uber today announced plans to acquire alcohol delivery service Drizly. The approximately $1.1 billion deal includes stock and cash and is expected to close in the first half of the year. The plan will build Drizly’s marketplace directly into the Uber Eats app, though the company notes that it will maintain Drizly as a standalone app offering as well, for the time being.
Certainly there’s a marketplace fit here. Uber provides the underlying ride hailing and delivery technologies, while Drizly can help the company expand Uber Eats into an even more potentially lucrative service.
“[CEO Cory Rellas] and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year,” Uber CEO Dara Khosrowshahi said in a release. “By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead.”
The service has experienced a steady roll out in markets across the U.S. Though local liquor laws have offered something of a hurdle for expansion. Last month, it added Atlanta to the list, teaming up with a dozen or so local markets and liquor stores to expand delivery. Like Uber Eats, Drizly teams with local merchants in the markets it services. The company says its services reach more than 1,400 cities in North America at last count. No doubt pandemic-related shutdowns have also gone a ways toward expanding the appeal of alcohol delivery.
Founded in 2012, Boston-based Drizly has raised just under $120 million to date, per Crunchbase. That includes a $34.5 million Series C back in late-2018. More recently, the service was hit with a data breach. The breach, which was disclosed last July, was believed to have impacted up to 2.5 million accounts.
Uber says it expects around 90% of the payment to Drizly stockholders to be made in Uber stock, with the remainder coming via cash. The deal will be is pending standard regulatory approval.
Source: https://techcrunch.com/2021/02/02/uber-is-buying-alcohol-delivery-service-drizly-for-1-1b/
