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Down market be damned, Better.com will be the next real estate company to be publicly traded on the Nasdaq stock market after a vote on Friday.
Shareholders overwhelmingly approved the plan to merge the digital mortgage lender Better HoldCo with a special purpose acquisition company. The merger is expected to close “on or about August 22,” according to a filing with the U.S. Securities and Exchange Commission.
The company will be known as Better Home & Finance Holding Company and is expected to trade under the stock ticker BETR after merging with Aurora Acquisition Corporation.
The initial public offering will cap off two years of delays and uncertainty over whether the plan would come to fruition. It will mark the next chapter for the real estate technology company that struggled through a market downturn and repeated public relations issues on its long road toward going public.
A company representative declined to comment on the merger, which was first reported by HousingWire.
The initial public offering is expected to inject Better with an infusion of cash, estimated between $550 million and $750 million, according to previous filings.
Better CEO Vishal Garg.
“After closing of the proposed business combination with Aurora, we expect to have substantial cash on our balance sheet to accelerate our focus on homeownership innovations and create additional products that continue to delight our customers,” Better CEO Vishal Garg said in a filing in late July.
The merger had been delayed multiple times over the past two years as Better struggled to ride down from the pandemic-era real estate highs, often in the public eye.
Riding the frenzied real estate market between 2020 and early 2021, Better ballooned in size and revenue. At one point, it boasted having more than 11,000 employees. As revenue began to fall, the company initiated multiple rounds of layoffs that often made headlines, including one round just before Christmas 2021 that was conducted in an online meeting.
When refinancing activity dropped by an estimated 90 percent, Better initiated multiple rounds of layoffs, starting with a cut of 900 employees between Thanksgiving and Christmas in 2021. Recordings of the mass firing went viral.
“This is the second time in my career I’m doing this and I do not do not want to do this,” Garg said during the call. “The last time I did it, I cried. This time, I hope to be stronger.”
After a brief leave of absence, Garg returned and would go on to gain more experience shedding employees, though things didn’t appear to get any easier.
Several of the estimated 3,000 employees who were laid off in March 2022 found out they were cut when their severance pay showed up in their bank accounts before they were notified they had been let go.
As of June 2023, Better reported having 950 employees, a 91 percent reduction over the course of a year and a half, according to an SEC filing. At the time, 43 percent of workers were in the U.S., 44 percent were in India and the rest in the United Kingdom.
The company attempted to hold onto employees in March 2022 by promising up to $100 million in retention bonuses if employees would stay on board for another year as executives continued attempts to steer Better toward a public offering.
Meanwhile, amid slower home sales in 2023, Better backed away from its ambition to operate its own end-to-end real estate service. The company had its own real estate brokerage subsidiary, Better Real Estate, and had hoped to operate in all 50 states.
Better Real Estate was licensed in 37 states and Washington, D.C. and employed 80 in-house real estate agents as of Dec. 31. That was an 83 percent drop from a year ago, when Better Real Estate’s in-house agent count totaled 470.
In June, the company laid off agents working at Better Real Estate and moved instead to partner with outside real estate agents.
Better Real Estate generated $23.1 million in revenue for Better in 2022. The company posted an $889 million net loss for the year. The company reported in July that it lost $89.9 million in the first quarter of this year.
The company attributed its losses to high interest rates, decreased productivity, investments in the business, and a damaged reputation from news coverage of its layoffs, lawsuits and an apparent SEC investigation.
The SEC informed Better this month that it had “concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better.”
