Figure Technologies, providers of alternative home equity tapping tools including a sale leaseback offering that is competitive with traditional reverse mortgages, is poised to become a “unicorn” after its latest round of financing; a term used to describe a startup that is valued at $1 billion or more.
Co-founder and CEO of Figure Technologies Mike Cagney is raising over $100 million for the company, bringing it to a $1 billion valuation less than two years after its founding, according to a report from Bloomberg.
The funding round has yet to close, which could affect the final valuation and amount. However, the company is slated to make $80 million in loans this month alone, according to sources familiar with the situation who spoke to Bloomberg on condition of anonymity. Figure itself has declined to comment.
In the past, and unlike other entities offering alternative equity release products, some of Figure’s marketing materials have aimed to position themselves as a direct competitor to reverse mortgage products. The company announced a new sale leaseback offering in November 2018, Figure Home Advantage, which was described on Figure’s website as “better than a reverse mortgage.”
“Reverse mortgages don’t have a good reputation, and can’t help a lot of people because of the age demographic, or just the math if it works out,” said Wendy Harrington, CMO of Figure in a January interview with RMD. “So, I think people are excited to hear that there’s another option out there, and I would also say that this is a situation that’s going to evolve over time.”
Figure also hired a new head of wealth and asset management in March which acted to expand the company’s positioning as a vendor of tools that can help seniors in funding their retirement.
Increasing prevalence of alternative equity tapping products can be a positive development for the reverse mortgage industry according to some. Some companies that offer such products have even created partnerships with reverse mortgage lenders. One such company, New York-based EasyKnock, revealed to RMD that it engages in partnerships with reverse mortgage companies to offer its own products to people who may not qualify for a reverse mortgage.
Read the original story related to Figure’s latest funding round at Bloomberg.
Former staffers from HUD, FHA and the GSEs weigh in on how to press ahead in this volatile reverse mortgage climate.