Ask a firm about a portfolio company they just invested in—they can’t wait to hop on the phone. But you get crickets as soon as things go sour.
That’s what we’re seeing this week at Better.com, the digital mortgage unicorn I wrote extensively about last winter after the company laid off hundreds of employees over Zoom—then proceeded to double down on criticism of the employees it had fired to widespread public condemnation.
Better’s CFO and interim president Kevin Ryan sent an email to employees yesterday, announcing that—due to market conditions in the real estate market—it was conducting yet another round of layoffs in both the U.S. and India. This time, approximately 3,000 people—or around 35% of the company’s remaining staff—will ultimately be let go by the end of this week, according to people familiar with the matter.
“This decision is driven heavily by the headwinds affecting the residential real estate market,” Ryan wrote in the letter, seen by Term Sheet, noting later that anyone directly affected “should receive a call over the coming days from a member of the Better leadership team” via personal phone and email.
A phone call would be a departure from the first round of layoffs in December in which CEO Vishal Garg notified 9% of its employees they were being let go via Zoom. However, some employees in this round found out a hard way as well—by coming upon a severance payment in their payroll app, as TechCrunch reported yesterday. A Better spokesperson confirmed with me that “a small number of employees were unintentionally notified” of their separation ahead of schedule. “This was certainly not the form of notification that we intended and stemmed from an effort to ensure that impacted employees received severance payments as quickly as possible.” (CEO Garg declined to speak with me for this story)
Sure, rising interest rates are spawning a decline in mortgage applications, but any mention of the events at the company over the last few months (apart from “this has not been an easy few months”) was notably absent in Better’s letter to staffers. Here’s a recap: There were the initial layoffs over a Zoom call. Then the company’s town hall meeting immediately thereafter in which Garg told employees they would “not be able to fail twice.” Then there were Garg’s comments about how those ex-staffers had been “stealing” from colleagues and customers, his temporary resignation, his return, executive resignations, and now this. It’s been a whole mess. What’s worse, it has impacted thousands of employees.
What do Better investors think of all of it, and how is the company’s dwindling size impacting their investment? It’s a question I can’t get an answer to.
I reached out to eight of the company’s investors yesterday—SoftBank, Amex Ventures, Calm Ventures, Esalen Ventures, Fantail Ventures, L Catterton, IA Ventures, 1/0 Capital—all of whom either didn’t respond to me, or declined to comment.
Perhaps I shouldn’t be too surprised: It pays to be optimistic and wait this one out on the sidelines. Investors, who have collectively poured nearly $2 billion in funding into the company, were very near an exit just a few months ago. Better was set to go public via a SPAC merger at a $7.7 billion valuation by the end of last year. That merger has since been delayed. With the company now hemorrhaging employees, it’s going to be tough to rally buyers to line up out the door, and to get the lofty valuation it had hoped—not to mention, it’s a pretty bad time to try to go public anyway.
I queried Harshul Sanghi, the former head of Amex Ventures who is retiring at the end of this month, about the corporate venture arm’s investment in Better a few weeks ago during an interview. “They’ve had some challenges there on the leadership front, but if you look at the company, it’s still a very solid company,” he said. An American Express spokesperson declined to comment on whether that sentiment has changed at all.
Whoopsie… Bain Capital Crypto managing partner Stefan Cohen apologized on Twitter yesterday, not too long after declaring Bain Capital Ventures had closed its first crypto fund. The announcement, which was made on International Women’s Day, had revealed that all seven members of its newly minted crypto team were men.
Time to plan… This morning, President Biden signed an executive order instructing the federal government to make moves on regulating cryptocurrency and outlining how it wants to address risk. As part of the order, Biden directed the Department of Commerce to establish a framework across the U.S. government that will make the U.S. a leader in the digital asset space.
Note: In Monday’s newsletter I wrote that Activision Blizzard CEO Bobby Kotick was stepping down from the board of Coca-Cola. To clarify, he will finish the current term, but is not seeking re-election after his 10 years there serving as a director.
See you tomorrow,
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Jackson Fordyce helped curate the deals section of today’s newsletter.
- Acorns, an Irvine, Calif.-based retirement planning and investment platform, raised $300 million in funding led by TPG and was joined by investors including BlackRock, Greycroft, Owl Rock, Senator Investment Group, Torch Capital, Industry Ventures, Bain Capital Ventures, Headline, Galaxy Digital, Kevin Durant & Rich Kleiman’s Thirty Five Ventures, and others.
- Menlo Microsystems, an Irvine, Calif.-based electromechanical switch developer for battery chargers and electric cars, raised $150 million in Series C funding led by Vertical Venture Partners and Future Shape and was joined by investors including Fidelity Management & Research, DBL Partners, Adage Capital Management, Standard Investments, Paladin Capital Group, Piva Capital, and PeopleFund.
- AngelList, a San Francisco-based early-stage venture funding platform, raised $100 million in funding led by Tiger Global and was joined by Accomplice and others.
- Swiftly, a San Francisco-based digital retail platform, raised $100 million in Series B funding led by Wormhole Capital and was joined by investors including Liquid2 Ventures, Bramalea, Gaingels, Silicon Ventures, Proof VC, Western Technology Investment, Sand Hill Angels, and The Martin Family.
- Money View, a Bengaluru, India-based fintech platform offering loans and money management, $75 million in Series D funding from investors including Tiger Global, Winter Capital, Evolvence India, Accel, and others.
- Colossal Biosciences, a Dallas, Texas-based biosciences and genetic engineering company, raised $60 million in Series A funding. Thomas Tull and At One Ventures led the round and were joined by investors including Untamed Planet, Animoca Brands, Breyer Capital, Animal Capital, Robert Nelsen, Paris Hilton, Bold Capital, First Light Capital Group, Boost VC, Jazz Ventures, Builders VC, Green Sands Equity, Draper Associates, Charles Hoskinson, and others.
- Argyle, a New York-based employment data platform developer, raised $55 million in Series B funding led by Signalfire and was joined by investors including Bain Capital Ventures, Bedrock, and Checkr.
- JIFFY.ai, a Milpitas, Calif.-based data analytics automation platform for finance and operations, raised $53 million in Series B funding led by Eight Roads Ventures and was joined by investors including Iron Pillar, R-Squared, Nexus Venture Partners, Reaction Capital, and Rebright Partners.
- Salubris Biotherapeutics, a Gaithersburg, Md.-based biotherapeutic company developing novel antibody and protein-based therapeutics, raised $32 million in funding from Shenzhen Salubris Pharmaceuticals.
- Findem, a San Francisco-based A.I. recruitment platform, has raised $30 million in Series B funding led by Four Rivers and Quarry Capital Management and was joined by investor Wing Venture Capital.
- Canal, a San Francisco-based sales platform to promote D2C brands, raised $22.5 million in Series A funding led by Forerunner Ventures.
- Lendai, a Rishon LeZion, Israel-based fintech company providing U.S. financing to foreign investors, raised $13 million in seed funding. Meron Capital and Cardumen Capital led the round and were joined by investors including Discount Capital, Skywell Capital Partners, Mindset Ventures, and Viola Credit.
- Gridline, an Atlanta, Ga.-based digital wealth platform, raised $9 million in funding from investors including David Dorman, Mark Shoberg, David Cummings, Edwin Marcial, Kyle Porter, Garrett Langley, Sacha Labourey, and others.
- CoFi, a Lindon, Utah-based software company for construction lending, raised $7 million in seed funding led by Blackhorn Ventures, Metaprop and Tenacity.
- KurateDAO, a startup that uses crypto economic games to curate information, raised $6.85 Million in seed funding led by Polychain Capital.
- Enter, a San Francisco-based healthcare payment platform to get doctors paid from insurance companies, raised $5.7 million in seed funding. Menlo Ventures led the round and was joined by investors including Quiet Capital, Savantus Ventures, 500, SpringRock Ventures, Matt Roszak and Mato Peric.
- Kolleno, a London-based finance platform for credit control, raised £4M ($5.4M) in seed funding led by Eurazeo and Stride.VC and was joined by investors including Euler Hermes, HubSpot, and angel investors Michael Pennington, Mark Ransford, and Will Neale.
- MITO Material Solutions, an Indianapolis, Ind.-based chemical company creating hybrid polymer modifiers, raised $4.6 million in seed funding led by Ingevity and was joined by investors including Evergreen.
- Big Bold Health, a Bainbridge, Wash.-based health and wellness product developer, raised $4 million in Series A funding led by S2G Ventures.
- Dónde, a Salt Lake City, Utah-based PTO management platform, raised $3.3 million in seed funding led by Kickstart Fund and was joined by investors including Next Frontier Capital, Jeremy Andrus, Aaron Skonnard, and others.
- BearTax, an Alpharetta, Ga.-based software platform for calculating and filing crypto taxes, raised $3.2 million in seed funding led by Ascend VC and joined by investors including BAM Ventures, defy.vc, Draper Startup House, Hustle Fund, Tacoma Venture Fund, Sketchnote Partners, Liquid 2 Ventures, and others.
- Investcorp acquired S&S Truck Parts, a Schaumburg, Ill.-based distributor of private label and branded aftermarket truck parts. Financial terms were not disclosed.
- L Catteron acquired Taxa Outdoors, a Houston-based manufacturer of campers and trailers. Financial terms were not disclosed.
- Tecum Capital acquired a minority stake in TopDown, a North Hollywood, Calif.-based designer, manufacturer, and supplier of automotive products. Financial terms were not disclosed.
- Blockdaemon acquired Gem, a Los Angeles-based cryptocurrency API company. Financial terms were not disclosed.
- DealMaker acquired Ridge Growth Agency, an Austin-based digital marketing firm for capital raises. Financial terms were not disclosed.
- Neuraxpharm Group acquired Brain Therapeutics, an Athens, Greece-based marketing and distribution company with a focus on the central nervous system. Financial terms were not disclosed.
- Wellness Pet Company, a Tewksbury, Mass.-based pet food and treat producer, is planning to raise more than $600 million in an IPO, per Bloomberg. Clearlake Capital Group backs the firm.
- Games Global, an online games supplier, is in talks to go public via a merger with Tailwind International Acquisition Corp., a SPAC, per Bloomberg. A deal could value the company at around $3 billion.
- LanzaTech NZ, a Skokie, Ill.-based bio-processing platform for improving waste carbon treatment, agreed to go public via a merger with AMCI Acquisition Corp. II, a SPAC. A deal would value the company at approximately $2.2 billion.
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