Nima Ghamsari, co-founder and CEO of Blend, speaks during the Sooner Than You Think conference on October 16, 2018 in Brooklyn, New York.
Alex Flynn | Bloomberg | Getty Images
Digital loan start-up Blend raised $ 75 million in new funding as the demand for streamlined mortgage applications grew during the coronavirus pandemic.
The move is valued at nearly $ 1.7 billion, a jump of more than 70% from the previous funding round a year earlier, CNBC has learned.
Blend is growing rapidly as U.S. banks and credit unions seek help updating lengthy, paper-intensive credit processes. Founded in 2012, the start-up started with software that allowed banks to offer faster digital mortgage applications. More recently, auto loans, account openings, and homeowner insurance have been offered.
As with digital adoption trends in banking and e-commerce, the pandemic led to a surge in demand for Blends software: the volume of refinancing applications rose more than 1,000% in March, and purchase applications rose more than every month since then 100% May according to company information.
The Series F funding round was led by Canapi Ventures, a fintech VC fund backed by the banking industry and partially led by Gene Ludwig, a former US regulator who founded Promontory Financial Group. Existing investors Temasek, General Atlantic, 8VC and Greylock also participated in the round.
"We're seeing banks accelerate their digital transition from three to five years to months," said Jeffrey Reitman, partner at Canapi Ventures, in an interview. "What really got us to invest now was just looking at all of their expansion opportunities," he said across the retail banking business. "We just think they got stuck in a great place in the market."
Wells Fargo, the U.S. bank, and Truist are among Blend's 250+ customers, and the company has processed over $ 771 billion in credit so far this year.