Morty, an online mortgage marketplace, announced today they have closed a $25 million Series B financing round with the entirety of the funding in the form of equity. This gives the company a valuation of $150 million, said Morty cofounder Nora Apsel. Previously the company had a valuation in the $10 to $50 million range, according to Crunchbase. The five-year old company has raised $38.4 million to date.
“This reflects both our growth and the opportunity people see in the market,” said Apsel. “We are really well positioned to continue to grow and continue to provide a better experience for customers over the long term.”
March Capital was the lead investor of the latest round. Existing investors Thrive Capital, Lerer Hippeau, Prudence Holdings, FJ Labs and Metaprop also contributed to the round, as well as the addition of Rethink Impact—a venture capital fund that focuses on investing in female leaders at the helm of technology companies.
Morty acts as both a marketplace model for users to shop around and compare mortgages in one place as well a broker of loan applications. They make money by charging a fee off the principal of the loan, paid for by the lender.
Apsel refers to Morty’s “tech-first” approach as the main driver behind why they are able to provide low rates to consumers. “We’re able to pull a best rate for an individual person at an individual time from our entire marketplace. We’ve been able to dramatically reduce the cost to produce loans by leveraging tech in various parts of the mortgage process and we’re able to pass those savings back onto the homebuyer.”
She cites their automated loan option as one of the tech-driven ways they help consumers keep costs low. This interactive feature uses a customer’s basic financial information to provide “extremely accurate quotes,” says Apsel. Once the consumer has entered their information they can create different scenarios—such as changing the terms, downpayment amount, etc—to options that fit their needs. “Typically with a traditional lender this is multiple back and forths with a person. At Morty a customer can do it completely on their own in a couple of minutes.”
Apsel adds they provide a Closing Date Promise which she explains as, “if we miss your closing date for specific reasons we’ll give you any money we make on this loan.”
According to data released by the company, over the past 12 months Morty closed over half a billion dollars in loans with revenue growth increasing 800% year-over-year. Their average loan amount is $325,000, with about half of their customers being first-time buyers.
Operating in 36 states and Washington D.C., they aim to expand nationally by the end of 2021. They currently only process purchase applications, with plans on their roadmap to roll out refinances.
As homeownership becomes more expensive, with prices rising rapidly as a response to low inventory and the likely increase in interest rates by the end of the year, platforms such as Morty may provide a way for more buyers to find a home purchase can be within reach.
Apsel concludes by saying, “As interest rates fluctuate that’s the time when it is the most important to both shop and compare for your mortgage and make sure you’re working with somebody who is truly your advocate. We believe that we are very well positioned, yes, to capitalize on the upside of things. But also to be the trusted solution in the hard times should they come.”