Morty, an online mortgage market, announced today that they have closed a $25 million Series B financing round with the entire financing in the form of equity. This gives the company a $150 million valuation, said Morty co-founder Nora Apsel. Previously, according to Crunchbase, the company had a valuation in the $10 to $50 million range. The five-year-old company has raised $38.4 million to date.
“This reflects both our growth and the opportunities people see in the market,” said Apsel. “We are really well positioned to continue to grow and provide a better experience for customers in the long run.”
March Capital was the lead investor of the final round. Existing investors Thrive Capital, Lerer Hippeau, Prudence Holdings, FJ Labs and Metaprop also contributed to the round, as did the addition of Rethink Impact, a venture capital fund focused 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 as a broker of loan applications. They make money by charging a fee from the principal of the loan, paid by the lender.
Apsel points to Morty’s “tech-first” approach as the main driver of their ability to offer consumers low rates. “We are able to get the best price for an individual person at an individual time from our entire market. We have been able to dramatically reduce the cost of producing loans by leveraging technology in different parts of the mortgage process and we are able to pass those savings back to the home buyer.”
She cites their automated loan option as one of the technology-driven ways they help consumers keep costs down. This interactive feature uses a customer’s basic financial information to provide “extremely accurate quotes,” Apsel says. After the consumer enters their information, they can create different scenarios, such as changing the terms, deposit amount, etc., for options that suit their needs. “Typically with a traditional lender, this is several times back and forth with one person. At Morty, a customer can do it all by themselves in minutes.”
Apsel adds that they offer a cut-off date promise that she explains as, “If we miss your cut-off date for specific reasons, we’ll give you all the money we’re making on this loan.”
According to data released by the company, Morty has taken out more than half a billion dollars in loans in the past 12 months, with annualized revenue growth increasing by 800%. Their average loan amount is $325,000 with about half of their customers being first-time buyers.
They operate in 36 states and Washington DC and aim to expand nationally by the end of 2021. They currently only process purchase requests, with plans on their roadmap to roll out refinancing.
As home ownership becomes more expensive, prices rise rapidly in response to the low inventory and the likely rise in interest rates towards the end of the year, platforms like Morty could provide a way for more buyers to find a home purchase right at their fingertips.
Apsel concludes by saying, “As interest rates fluctuate, it’s the time when it’s most important to both shop and compare for your mortgage and make sure you’re working with someone who is truly your attorney. We believe that we are very well positioned, yes, to take advantage of the benefits of things. But also to be the trusted solution in difficult times when they come.”