New York-based mortgage lender Better has acquired digital mortgage broker Trussle at what is believed to be a discounted price.
The terms of the deal have not been disclosed, but the Financial Times reports it being worth “about” $9m, or £6.5m, some way off the £26m of funding Trussle has secured since its founding in 2015.
Better was started in 2016 and has benefited enormously from the explosion in mortgage activity that has occurred stateside recently – in 2020 it lent $24.2bn (around £17.5bn) in volume – 490% growth over 2019, resulting in an earnings before interest, taxes, depreciation and amortisation figure of $281.1m (£203m).
The UK mortgage market is valued at £1.5tn.
In May this year, the firm announced its intention to merge with Aurora Acquisition and become publicly listed in a $7.7bn deal (£5.6bn).
Aurora is a special purpose acquisition company (SPAC), a company with no commercial operations set up purely to raise money through an initial public offering with the ultimate intention of buying another company.
SPACs have become incredibly popular in the USA since the pandemic made its way to its shores as investors have battled with market volatility, attracting much excitement and criticism.
Trussle has also had a volatile time of late. In January 2020, Trussle founder and chief executive Ishaan Malhi resigned suddenly and with immediate effect, prompting a search for a new boss.
Ian Larkin was announced as taking on this role on 3 March that year. Trussle says that he will continue to lead the mortgage broker alongside the existing management team post-acquisition.
Better founder and chief executive Vishal Garg comments: “We researched the UK market and were surprised to see how we could make it so much better for consumers buying and financing a home for the first time.
“We found a kindred spirit in the team at Trussle, who have developed a platform that we can work alongside to help every Briton own their own home. Making homeownership affordable and accessible for all customers is a key tenet of a well-functioning credit system and we are here to help grow Trussle and make it even better.”
Larkin adds: “Better and Trussle were both founded on the understanding that consumers increasingly prefer to use online services to shop for and transact on major life purchases. It is 27 years since the World Wide Web was launched and most consumer industries have embraced it by now but the UK mortgage market is still characterized by analogue systems and processes.
“This market should not require consumers to apply for a mortgage 5 months before the end of the Stamp Duty holiday.
“We are very excited about becoming part of Better, and we are confident that Trussle’s future looks brighter than ever as part of a large and growing international organization that shares our commitment to making homeownership more simple, fair and accessible for all.”
Trussle has been approached for further comment regarding the terms of the deal.
