What the business is
Better is a digital mortgage lender that moved the whole mortgage process online, cutting closing times from an industry average of 42 days to 21.
The bet
US-style digital mortgages can win in the UK, where homeownership slid from 70.9% in 2003 to 63.9% by 2018.
Starting capital
About $9M for Trussle per people familiar; SoftBank put $500M into Better a month before the SPAC, plus a $1.5B PIPE
How it started
Vishal Garg founded Better in 2016 after an all-cash buyer beat his family's home purchase through a traditional lender; he started the company with the down payment he had set aside.
What happened
On July 12, 2021, Better announced its first overseas expansion: acquiring Trussle, a UK digital mortgage and insurance broker founded in 2015 and backed by Goldman Sachs and Finch Capital, at a valuation of roughly $9 million. Garg promised to 'help every Briton own their own home'; Trussle CEO Ian Larkin called Better a kindred 'large and growing international organization.' The announcement came ahead of Better's SPAC merger with Aurora Acquisition Corp, valuing Better at $7.7 billion, expected to close in Q4 2021.
What has to be true
Better's US engine was at cyclical peak: $25B in 2020 loans and $800M of revenue amid the refinancing boom.
Trussle brought a ready UK platform and an aligned digital-first mission, cheaper than building UK operations from zero.
The UK market offered structural demand: homeownership had fallen nearly seven points from its 2003 peak by 2018.
SoftBank's fresh $500M check and the $7.7B SPAC gave Better the balance sheet to expand before going public.
What can be applied
A small acquisition can open a regulated market faster than building - as long as the capital behind the expansion holds.
Aftermath
As of the July 12, 2021 announcement, Better's SPAC merger with Aurora was expected to close in Q4 2021, and Trussle was to become the vehicle for Better's UK push under Larkin, who said Trussle's future 'looks brighter than ever' inside Better.
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