BankTechFintech

LoanSnap snaps up $30M in Series B funding round

The round has participation from notable investors including the Chainsmokers’ VC firm MANTIS, former NFL quarterback Joe Montana and LinkedIn co-founder Reid Hoffman

LoanSnap, which provides mortgage loans using AI to analyze a person’s finances, has received a $30 million capital injection with its Series B financing round led by True Ventures.

The funding had participation by some notable existing investors including the Chainsmokers’ venture capital firm MANTIS, former NFL quarterback Joe Montana, new investor LinkedIn co-founder Reid Hoffman, among others.

LoanSnap plans to use the funding to scale into new loan types and across the U.S. The company uses “smart loan technology” that uses AI to assess a person’s finances and aims to save customers money. Karl Jacob, CEO and co-founder of LoanSnap told FinLedger the company uses 30 different data sources to analyze a financial situation. Jacob said the company’s mission is to improve an American’s financial situation.

“Our goal is to stop focusing on selling low interest rates — which is what everybody else in the industry does — and focus on what the person’s unique financial situation is. And how we can best improve it,” he said. “We use a lot of technology in order to do that. But basically you understand your finances before you get into a mortgage vs. months later when it’s too late.”

Launched in 2018, the company has raised $64 million in VC funding to date. Along with the funding announcement, the company tapped new CFO Olivia Man, who previously served as Director of Capital Markets at SoFi. She has over 14 years of experience in the financial sector.

Jacob said the company’s analysis of a person’s financial situation is similar to doing a financial forecast for a company, and they show customers how much money they’re losing on a per month basis among other things.

“We are a full stack mortgage originator, so we create the loans from beginning to end, and then we sell those loans to financial institutions,” Jacob said. “One of the recent positive pieces of news is that we do have a direct relationship with Fannie Mae now. We’re selling loans directly to the government, which gives us a lot better access to different products. And of course, the best pricing you can possibly get.

LoanSanp has about 60 employees and is hiring this year across departments. The company saw its valuation double with this funding round compared to its previous round. Additionally, LoanSnap saw its revenue more than double from 2019 to 2020.

The startup is doing 18 loans per production employee, he said. For comparison, Quicken Loans said in a recent report that it’s doing six loans per production employee.

“A lot of people focus on loan volume, they focus on top line revenue. And those are nice numbers, and they’re big numbers, I get why you’d want to focus on those,” he said. “But I’ve built businesses over the last 15 to 20 years, and the ones I’ve done that have survived and thrived through the dot com bubble and 9/11 have always focused on unit economics first, and making sure that we got that right. And then scaling the business vs. scaling the business and trying to fix unit economics on the back-end.”

In other recent proptech news, PowerPay, whose platform provides unsecured home renovation loans up to $100,000, is looking beyond lending for its growth. The King of Prussia, Pennsylvania-based company is dipping its toe into the insurance and payment markets, and is eyeing mortgages and HELOCs. It’s even contemplating a bank charter.

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