Startup mortgage lender Better plans to go public by merging with a special-purpose acquisition company, according to people familiar with the matter.
Better Holdco Inc. plans to merge with Aurora Acquisition Corp. , a SPAC sponsored by investment firm Novator Capital, at valuation of roughly $7 billion pre-money, the people said. The transaction could be completed this week.
SoftBank Group Corp. , which recently invested $500 million in Better, could put in another $1.3 billion through a PIPE, or private investment in public equity, a common feature of SPAC mergers. (Better might place $400 million of that with other investors.) The remaining $200 million of the $1.5 billion PIPE is to come from Aurora, whose sponsor is the investment vehicle of Icelandic billionaire Thor Bjorgolfsson.
There has been an explosion lately in deal activity involving SPACs, which raise money in an initial public offering and then look for a business to combine with, as private companies seek a more streamlined route to the public markets than through a traditional listing.
Founded in New York in 2014, Better provides home loans for consumers through its website and banks such as Ally Financial Inc. Better had over $850 million in revenue in 2020 and more than $200 million in net profits, according to people familiar with the company’s finances.