It is no secret that the coronavirus pandemic has greatly impacted the lending and mortgaging industry whilst exposing banks’ weaknesses. With record-low interest rates, lenders have seen a big increase in mortgage refinance applications coupled with a sudden spike in demand for Paycheck Protection Program small business loans. Within weeks of the pandemic hitting the U.S., banks reported a nosedive in profits, even at the biggest institutions. Adding to this was an increase in deferrals and forbearances. The outdated and analog methods of banking were shown to be in need of a technological change as financial institutions leapt to resolve the crisis.
Enter San Francisco-based SaaS startup Blend, whose mission is to bring simplicity and transparency to consumer banking through partnerships with banks and lenders to create accessible, low stress lending experiences. Founded in 2012, Blend offers modern lending experiences to consumers with the company’s Digital Lending Platform that streamlines access to banking products. As a result, banks and lenders acquire more satisfied customers through increased productivity and better relationship management.
The pandemic has resulted in rapidly growing demand for Blend’s software as it helps financial institutions respond with more agility to the fluctuating market. According to company figures, refinance application volumes were reported to be 1000% higher in March, whilst purchase applications grew by over 100% every month since May. Accelerating its momentum in 2020, Blend is working on developing even more products including digital closing solutions for mortgages and home equity loans, a user-friendly mobile app for loan officers, and new reporting tools for lenders.
Aiding the growth, Blend raised $75 million in the latest round of funding, seeing its valuation hit $1.7 billion. The Series F round was led by Canapi Ventures.
Speaking on the funding, Marc Greenberg, Blend’s head of finance, said "Our customers are our top priority. This additional capital allows us to accelerate our broader strategy to create long-term value by serving our customers, expanding our offerings, and building out the Blend ecosystem. Our goal is to deliver software that gives lenders the flexibility to meet the evolving needs of consumers. We're committed to being the digital layer that enables millions of people to gain access to the capital they need.”
Since the start of 2020, Blend has added 130 new employees to its full-time workforce of 434 without having to lay off employees to save cash. Blend has helped over 250 lender customers (including Wells Fargo, the Navy Federal Credit Union, and U.S. Bank Trust) process $771 billion in loan volumes so far.