(Bloomberg) – Nima Gamsari knew he needed to catch a big client.
He spent years traveling the heart of America, meeting with senior mortgage leaders, inviting them to partner with his San Francisco-based Blend Labs Inc. Customer filing for mortgage underwriting is an expensive undertaking that can take weeks to process.
Columbus, Ohio. Lewisville, TX. Des Moines, Iowa: They’re scattered across the country, ”Gamsari said. “We’ll just do our best to contact them.”
Gamsari will unveil his nine-year-old startup on the New York Stock Exchange on Friday, the culmination of years of Blend’s transformation into a business now valued at nearly $ 4 billion. In these early meetings pleading with lenders to use the Blend platform, Ghamsari built a giant that helped process $ 1.4 trillion in mortgages last year alone and extended its tentacles to credit cards and even auto loans.
The public listing will also prove to be a personal boon for Gamsari, as his stake in the company is estimated at $ 300 million. As part of the long-term reward, he will receive additional shares that could eventually more than double his current stake in Blend if the share price reaches various targets.
Gamsari’s interest in financial technology began in high school. After taking a part-time job at McDonald’s Corp. and Starbucks Corp. to raise money for spending, he soon found an easier way to raise money: by selling Magic: The Gathering cards on EBay Inc.
When Gamsari started out, customers sent him checks and money orders in exchange for his goods. Then the first darling of financial technologies, PayPal Holdings Inc., entered the scene.
“This has completely changed,” he said. “I just remember how fintech changed the way people transact online.”
Fast forward two decades, and Gamsari’s own company is doing something similar: it accelerates many of the stages of loan underwriting – from income verification to identity verification – with technology. He even counts PayPal co-founder Max Levchin as one of the first investors in Blend.
Most of his early meetings ended with Gamsari hearing that the mortgage industry was simply not ready for this technology. That began to change after a dinner with the head of mortgage lending at one of the nation’s largest banks in early 2015 at a fine Italian restaurant in San Francisco’s financial district.
“His eyes just lit up,” Gamsari said, noting that the two companies later signed a partnership. “I don’t think the company would have existed today if it hadn’t been for this casual dinner.”
Around the same time, rumors began to circulate in the mortgage industry that one of the largest home lenders on the planet was also creating an app for the home lending process. Banks’ worst fears were confirmed during the 2016 Super Bowl, when Quicken Loans unveiled the Rocket Mortgage, effectively putting the entire mortgage process in the hands of consumers.
“I just remember that the next week I started getting calls from creditors who were in a difficult situation,” Gamsari said. “They are like, ‘I got it.”
Blend was soon awash with partnership offers. The next year, the startup announced deals with Wells Fargo & Co. and US Bancorp. The firm currently has connections with nearly 300 banks and processes an average of $ 5 billion in loans every day.
For years, financial technology companies have been loved by venture capitalists who have peppered them with funds. Blend raised $ 300 million in January from Coatue and Tiger Global. It has now sparked a flood of initial public offerings from many of the industry’s largest startups, including Marqeta Inc. and SoFi Technologies Inc.
“Successful tech IPOs have prompted a number of mature fintech unicorns in 2021 to consider going public,” said Donna Parisi, head of financial services and financial technology at law firm Shearman & Sterling. “Wall Street’s appetite for leading fintech companies will only grow.”
Gamsari, a former semi-professional poker player born in Iran and raised in Cincinnati, will list his firm on the NYSE under the symbol “BLND” with the backing of banks such as Goldman Sachs Group Inc. and Allen & Co. still maintain great power even after being offered.
The 35-year-old owner will own all Class B shares, each of which is entitled to 40 votes, up from one vote per Class A share, according to regulations. This means that he will be able to determine or “significantly influence” any action requiring a shareholder vote, including the election of a board or approval of any merger.
Gamsari said this ownership structure would help protect the company’s focus on long-term projects that could take years of patience to complete.
“There is probably a five-year lag in trying to build something, scaling it up and using it, and even with all the good things that have happened to us along the way, this is kind of normal in financial services,” he said. “This requires real conviction. It’s one thing if we need to convince a small number of people, and it’s another thing to convince the whole world. “
(Updates to reflect Gamsari’s share in the fifth paragraph.)
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