Figure Technologies is probably one of the most underrated companies in finance today.
The company was founded by five people, including Mike Cagney who previously founded SoFi, the $4.5 billion consumer lending startup. They have raised over $120 million to date from DST Global, DCM, Ribbit Capital, Morgan Creek Digital and many others, along with growing to over 100 employees in less than 18 months.
The company creates innovative consumer financial solutions for home improvement, debt consolidation and retirement while providing its members with financial education and financial empowerment. Its mission is to build and promote innovative financial products on blockchain that benefit consumers and eliminate rent-seeking, illiquidity and other inefficiencies present in current financial markets.
Figure got started with its flagship product, Figure Home Equity Line, which is a fixed-rate line of credit that provides approval in as little as five minutes and funding in five days, all online. It combines the best characteristics of a traditional home equity loan and a HELOC. Consumers can borrow against the equity in their homes without the paperwork-intensive, 45-day process traditional lenders require. Since September 2018, Figure has funded more than 1,500 HELOCs for members across 37 states.
The team than quickly moved to launch Figure Home Lease Back, based on a belief that many Americans will face challenges funding their retirements. These homeowners may be able to access the equity in their homes to fund the shortfall in retirement income using the new product, which is a more transparent and straightforward alternative to reverse mortgages. Figure Home Lease Back members can sell their homes to Figure, get cash up front and stay in place as renters for as long as they wish. Figure covers all expenses, including property taxes, upkeep and insurance.
The first two products, along with future products around wealth management and investment funds, are all built and deployed on Provenance, a distributed stakeholder blockchain. The company leverages the security, efficiencies and cost advantage of blockchain for loan origination, financing and sales and has a diverse set of funds, banks and dealers active on Provenance today. While Figure was the first loan originator on Provenance, several other originators plan to use the platform by mid-2019.
Additionally, the company announced today Provenance Blockchain, Inc. ("PBI"), the administrator for the Provenance.io blockchain, has completed a $20 million security token offering to support the continued development and expansion of the Provenance.io ecosystem. Since Figure built the blockchain, it has obviously been an early adopter of Provenance.io, originating, financing and selling its HELOC loans entirely on the platform.
Not only has Provenance been embraced by many incumbent financial institutions, like Franklin Templeton, it is also working and being used to originate more loans than any other blockchain I have seen. The most exciting part? Provenance has released a white paper through collaboration with Morningstar that suggests blockchain-based instruments will receive higher credit ratings as well.
Having a more efficient, lower cost, higher rated credit instrument is a significant advantage. Not only do I find Figure and Provenance interesting, but I believe they will both be incredibly valuable in the future. This led us to make our second largest investment to date earlier this year in the equity of Figure.
Betting on impressive teams with track records of execution, who are going after massive market opportunities, has proven to be a winning strategy in the past. Don’t be surprised if this time is no different.
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