Figure's lending division spun off under new parent company

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Figure Technologies has placed its lending division under a new umbrella company, it announced Monday.

Doing so sets up the foundation for Figure to take its lending arm public. Speculation has been swirling that these plans will come to fruition sometime this year.  

(Figure did not immediately provide commentary on whether the reorganization is in preparation for an initial public offering.)

Figure Lending will now operate under Figure Technology Solutions, which will develop and distribute a proprietary platform to lending partners and investors.

"By creating a dedicated business, FTS will focus its resources on the continued success of its technology platform, delivering cutting-edge solutions to drive efficiency across the lending ecosystem," said Mike Cagney, co-founder and CEO of Figure Technology Solutions, in a press release.

Making FTS its own entity is a reflection of  "growth and vision for Figure's technology-enabled lending platform that has been built to reshape the industry, starting with HELOCs," the company added. 

Figure has concentrated its efforts on growing market share in the home-equity line of credit space. Last year, it launched a HELOC wholesale loan production platform. The company also entered into partnerships with independent mortgage bankers to provide a private-label HELOC product.

In the third quarter of 2023, Figure Lending originated over $1 billion worth of HELOC volume across its loan channels, it claims.

Figure has tapped Goldman Sachs Group Inc., JPMorgan Chase & Co. and Jefferies Financial Group Inc. to help with an initial public offering, according to a Bloomberg article in late November.

The timeline for when its lending arm will be taken public remains unclear, though a Bloomberg report pointed out it may happen in the first half of 2024, at a valuation between $2 billion to $3 billion. Cagney would find another CEO to take the helm of the unit it refers to internally as LendCo.

Concurrently, Figure announced Monday the rollout of Figure Markets, a trading platform for blockchain-native assets. 

That platform has thus far secured over $60 million in a Series A funding round, Figure said. The  round was led by Jump Crypto, Pantera Capital and Lightspeed Faction with participation from Distributed Global, Ribbit Capital and CMT Digital.

"[One] of the macro trends that I believe [is] going to persist for many years is bank credit contraction," Cagney said, speaking at DC Fintech Week in late November. "There needs to be a construct for a private capital solution and blockchain is a tremendous way to do this. The cost and efficiencies that we can get from the technology — the ability to build homogenous assets, the ability to have immutable transaction history — that's the foundation that you need to create a liquid TBA and ultimately a pass-through market with a third-party guarantor."


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