Figure Technologies, the profitable lending business founded by Mike Cagney, recently underwent a staff reduction, cutting 20% of its workforce, according to a Bloomberg report. The layoff mainly impacted engineering staff and marks the company’s first round of staff reductions.
While Figure Technologies’ layoff came as a surprise to many, the fintech firm has been achieving noteworthy financial milestones. In the second quarter of 2023, Figures’ lending business reported a record $900 million in origination, generating $2.7 million in adjusted profit. The company also posted $83.5 million in revenue during the first half of the year, demonstrating strong growth.
These financial successes have prompted Figure Technologies to consider going public with its lending division, LendCo, in early 2024. Executives at the firm are currently in discussions with bankers to facilitate the IPO. The lending business boasts a remarkable 50%+ contribution margin, and Cagney anticipates a $2.5 billion valuation for LendCo upon its public debut. Such a valuation would position the company significantly ahead of its latest $3.2 billion valuation achieved in a venture-backed funding round in 2021.
Figure Technologies, founded in 2018 by former SoFi head Mike Cagney, operates using its proprietary platform, Provenance Blockchain. This platform facilitates various services, including loan origination, equity management, private fund services, banking, and payments.
The firm initially planned to go public in 2022 through a special purpose acquisition company (SPAC) called Figure Acquisition Corp., but the plan was scrapped, leading to the SPAC’s delisting from the New York Stock Exchange. Additionally, a proposed merger with Homebridge Financial Services in 2022 did not materialize due to regulatory delays.
Despite these setbacks, Figure Technologies continued to expand its offerings, launching a wholesale lending platform that grants loan originators access to the company’s home equity line of credit (HELOC) offering. Furthermore, the firm collaborated with four independent mortgage banks as private-label partners.
Figure Technologies’ commitment to innovation and its profitable lending business are likely to garner significant attention from investors as it moves forward with its IPO plans. The fintech firm’s unique approach, driven by blockchain technology, positions it well for future growth and success in the financial services sector.
