Mortgage

Mix Labs publishes its IPO registration assertion

Blend Labs took the next step in becoming a publicly traded company when the San Francisco-based mortgage technology company's registration statement went live.

Back in April, the company announced that it had filed a confidential registration statement indicating that it was planning an IPO.

The filing with the Securities and Exchange Commission does not include any amounts other than a placeholder number for the size of the offering. However, Blend announced that it is establishing a multi-class structure for its common stock, giving 40 votes per share to the Class B share that only the company's co-founder and chairman, Nima Ghamsari, will hold.

"The multi-class structure of our common stock is designed to ensure that Mr. Ghamsari continues to control or significantly influence our governance for the foreseeable future, which we believe will enable us to continue prioritizing our long-term goals rather than" short-term results, "the registration statement said.

The structure is designed to maintain Ghamsari's control until he leaves our company, the 35% ownership threshold is no longer reached, or 50 years have passed since the offer was closed.

This 35% threshold is one of the determining factors in determining whether Class B Shares are converted into Class A; if issued, the Class C Shares count towards this 35% of total capital.

“The issuance of Class C common shares to Mr. Ghamsari could extend Mr. Ghamsari's control over our voting rights and his ability to elect all of our directors and determine the outcome of most matters put to a vote by us shareholders by delaying the final conversion of the Class B common stock, "the statement said.

The risks identified in the statement include rapid sales growth and the concentration of blend.

"In 2019 and 2020, our sales were $ 50.7 million and $ 96 million, respectively, a 90% year-over-year growth rate," the filing said. "We anticipate our sales growth rate will decrease in future periods."

Additionally, the top five customers accounted for 34% of the company's sales in 2020. As of December 31, 2020, the company had 18 customers with annual sales exceeding $ 1 million, representing 53% of total sales last year.

The company's net losses in 2020 were $ 74.6 million, an improvement from $ 81.5 million in 2019. However, in the first quarter, Blend lost $ 27.1 million compared to one Loss of $ 16 million in the fourth quarter and a loss of $ 22.9 million for the same period last year.

Blend plans to list on the New York Stock Exchange under the ticker symbol BLND.

Goldman Sachs, Allen & Company, and Wells Fargo Securities are the leading book-running managers. KeyBanc Capital Markets, Truist Securities and UBS Investment Bank are the accounting managers and Piper Sandler, William Blair and Canaccord Genuity are co-managers for the proposed offering.

Blend joined the list of mortgage-related companies going public in the middle of last year.

Examples include HomeLight, which brought Sean Aggarwal to its board of directors because it is considering an IPO, and Better.com, which is joining the special purpose vehicle merger parade, a list that includes Doma, Finance of America, and United Wholesale Mortgage.

Not every company has implemented its IPO plans. The proposed IPO of Genworth Financial's mortgage insurance business, Enact Holdings, has been postponed due to market conditions. Meanwhile, Angel Oak Mortgage had to cut its planned offering when it started trading on June 17th.

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