Now it is better.
Digital lending company Better.com has received approval for its unconventional IPO plan, marking a major step forward for the company, HousingWire reported.
Shareholders of special purpose vehicle Aurora Acquisition Corp have voted in favor of the merger proposal, allowing Better.com to go public after a series of challenges.
New York-based Better.com’s IPO was anything but typical. After a nearly two-year delay from the original schedule, the company is expected to merge with SPAC Aurora Acquisition Corp. go public. There was strong support for the proposal at the shareholder meeting: at least 65% of the outstanding common shares voted in favor. as confirmed by Arnaud Massenet, CEO of Aurora Acquisition Corp.
Once the merger is complete, the combined company will receive $750 million in fresh capital, as detailed in Aurora’s July filing with the Securities and Exchange Commission (SEC). The course of this deal was not smooth as it was renewed three times due to adverse market conditions, significant layoffs, financial losses and a wave of negative publicity.
Better.com, founded in 2014 by CEO Vishal Garg, gained notoriety for massive layoffs, including laying off about 900 employees via Zoom in December 2021. According to Aurora’s SEC, the lender’s downsizing over an 18-month period reached about 91 percent filings. As of June 8, Better.com’s team had shrunk to around 950 members, a sharp drop from its peak of around 10,400 employees in the fourth quarter of 2021.
The company faced other hurdles, including an SEC investigation into allegations that CEO Vishal Garg misled investors ahead of the proposed SPAC merger. The SEC recently concluded that it has no intention of recommending enforcement action against Better.com. Financially, the digital lender reported a net loss of $888.8 million in 2022 and $89.9 million in Q1 2023, along with a significant decrease in funded loans from 18,559 in Q1 2022 to 2,347 in Q1 2023
More recently, Better.com has changed its real estate strategy, working with outside brokers and exiting its in-house brokerage subsidiary. Better.com was the 59th largest mortgage lender in the United States for the first quarter, according to Inside Mortgage Finance.
The market reaction following the shareholder vote was mixed. Aurora’s shares traded at $37.03, down 8.77% from the previous close. However, the stock price had previously risen 530 percent to $62.91 after the SEC declared the SPAC merger effective, reflecting the tumultuous course of Better.com’s IPO.
— Ted Shiner
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