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Mortgage Applications Plummet Again

The closely watched weekly data released by the Mortgage Bankers Association (MBA) on mortgage applications reported a precipitous drop after two weeks of gains, as spiraling rates, broader economic uncertainty and continued low inventory seem to be putting a longer-term damper on both refinancing and new mortgages. According to the latest Mortgage Bankers Association’s (MBA)… The post Mortgage Applications Plummet Again appeared first on RISMedia. The closely watched weekly data released by the Mortgage Bankers Association (MBA) on mortgage applications reported a precipitous drop after two weeks of gains, as spiraling rates, broader economic uncertainty and continued low inventory seem to be putting a longer-term damper on both refinancing and new mortgages. According to the latest Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey this week, applications are down 11% overall from last week after posting consecutives gains in the 2% range. The drop included both purchase applications (down 12%) and refinance (down 10%), according to the report. “Mortgage applications decreased for the first time in three weeks, as mortgage rates—despite declining last week—remained over two percentage points higher than a year ago and close to the highest levels since 2009,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “For borrowers looking to refinance, the current level of rates continues to be a significant disincentive.” The average 30-year fixed actually fell fractionally, from 5.53% to 5.49%, but the lending industry has seemingly already begun hunkering down for a tough year. “General uncertainty about the near-term economic outlook, as well as recent stock market volatility, may be causing some households to delay their home search,” Kan added. MBA previously criticized how the Federal Reserve has proceeded with its mandate to cool off inflation and raise interest rates, while also saying mortgage rates should not peak much higher than they are now, as markets have to some degree already priced in future rate hikes. The Association has continued to predict a significant pullback in mortgages this year compared to 2021, mostly driven by a decrease in refinances. Additional Findings:  The FHA share of total applications increased to 11.1% from 10.5% last week. The VA share of total applications remained unchanged at 10.5%. The USDA share of total applications remained unchanged at 0.5%. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.73% from 4.7%. The average contract interest rate for 5/1 ARMs decreased to 4.42% from 4.47%. Refinances continue to lag far behind this same period a year ago, down 76%. The post Mortgage Applications Plummet Again appeared first on RISMedia......»»

Category: realestateSource: rismediaMay 18th, 2022

Weekly mortgage applications increase as interest rates plummet to historic low

The historically low rate caused a 10 percent weekly surge in applications to refinance a home loan......»»

Category: topSource: foxnewsApr 15th, 2020

Coronavirus layoffs hit housing market, mortgage applications plummet

The coronavirus pandemic has seen more than 10 million people file for unemployment benefits in the past two weeks.....»»

Category: topSource: foxnewsApr 8th, 2020

Mortgage applications plummet 24% annually as coronavirus slams housing

The coronavirus appears to be splitting the mortgage market as more borrowers rush to refinance to save money on monthly payments and potential homebuyers back away fast......»»

Category: topSource: moneycentralApr 1st, 2020

Mortgage applications to buy a home plummet 24% annually as coronavirus slams spring housing

The coronavirus appears to be splitting the mortgage market as more borrowers rush to refinance to save money on monthly payments and potential homebuyers back away fast......»»

Category: realestateSource: cnbcApr 1st, 2020

First Guaranty Mortgage Corp. Tacks on Massive Layoffs With Bankruptcy Filing

The shifting mortgage market has sent ripples throughout the lending industry that have manifested in waves of layoffs as companies look to adapt to the changing times. While this has become a common trend in the past six months, some companies have struggled more than others. That’s been the case for First Guaranty Mortgage Corp.… The post First Guaranty Mortgage Corp. Tacks on Massive Layoffs With Bankruptcy Filing appeared first on RISMedia. The shifting mortgage market has sent ripples throughout the lending industry that have manifested in waves of layoffs as companies look to adapt to the changing times. While this has become a common trend in the past six months, some companies have struggled more than others. That’s been the case for First Guaranty Mortgage Corp. (FGMC), which announced yesterday that it had filed chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on June 30 along with its affiliate Maverick II Holdings, LLC. “While we have made considerable efforts to address our ongoing financial challenges related to the state of the mortgage market, we ultimately must do what is best for our borrowers and consumers,” said FGMC CEO Aaron Samples in a press release. The company claims in the petitions that it has experienced “significant operating losses and cash flow challenges” due mainly to the volatile mortgage lending market. “In 2021, intense competition for mortgage originations, in part due to the collapse of the refinancing market, resulted in a sharp decline in the Debtors’ performance,” read an excerpt from the filing. “The Debtors’ margins on the sale of loans also declined dramatically.” Like many mortgage companies that have seen their profits tumble amid the current market shift, FGMC’s filing painted a picture of its financial woes as mortgage rates have climbed in 2022. For the four months ending April 30, 2022, the Texas-based company tallied $23.3 million of after-tax net loss, which is partially attributed to lower origination volumes. Despite the company raking in $1.7 billion in mortgages during that time, FGMC indicated that its sales profit gains “continued to be very weak.” The bankruptcy filing comes less than a week after the Texas-based mortgage lender laid off nearly 80% of its workforce on June 17. According to a WARN notice sent to the Texas Workforce Commission, FGMC terminated 428 of its 565 employees. Initial reports regarding the firings indicated that the layoffs were caused by “significant operating losses and cash flow challenges due to unforeseen historical adverse market conditions for the mortgage lending industry, including unanticipated market volatility.” While the layoffs indicate the persisting strain mortgage companies have had to endure under rising mortgage rates and shrinking refinance originations, the approach in which FGMC fired its workers harkens back to a now-infamous wave of layoffs conducted by Better.com CEO Vishal Garg.  National Mortgage Professional (NMP) reported that Samples fired workers during a 10-minute virtual meeting on Microsoft Teams. Based on former employee accounts featured in NMP, Samples cited “several general economic hurdles” plaguing FGMC, like market compression and geopolitical issues, as reasons for terminating everyone on the call immediately. RISMedia also spoke with a former FGMC employee impacted by the layoffs, who confirmed what the reports indicated. The former employee requested that they be anonymous in this story and drew comparisons between FGMC’s firings and the Better.com Zoom-call firings. “For Better Mortgage, they didn’t show much empathy,” they say. “It was pretty similar to last Friday. There was a brief call over Microsoft Teams, and he said, ‘if you are in the call, your job has been cut.'” Admittedly, the former employee said the announcement came as a surprise despite a general understanding that the mortgage lending environment has been in flux for the past year and a half. “Our business was shrinking for sure, but there was some niche in the industry,” they say, highlighting FGMC’s work with non-qualified mortgages as an example of products that the company could have leaned on during the market shift. On June 15, FGMC announced a new stand-alone second lien program that the company touted as an “exciting new addition” to its suite of non-QM products under its affiliate Maverick Solutions. “The market is still there, so they were optimistic and were coming up with new products,” the former employee continues. “Our impression was they’ll be alright.” Several other former employees took to social media to lament the loss in the days following the layoffs. “One constant in my nearly 30 years in the mortgage industry is that when I find a job that feels like home, I am going to give well over 100% and will not leave until they kick me out,” wrote Stacy Lighton, a former VP of Credit Policy at FGMC, on LinkedIn. “My most recent position as vice president of Credit Policy was with First Guaranty Mortgage Corporation, a company that felt like family until last Friday when most of the staff was abruptly released.” Other impacted employees painted pictures of the unexpectedness of the incident. “FGMC cut about 80% of its workforce on Friday and has stopped accepting new mortgage applications,” read a LinkedIn post by former FGMC Account Executive Tina Ogden Smith. “The company laid off around 500 employees without severance payment,” the post continues. “Sure sign of doors closing in near future.” According to the former employee, a severance package was not offered immediately after the layoffs occurred. However, they tell RISMedia that FGMC has since offered severance, including a week’s work-worth of pay for every year they worked at FGMC. Employees weren’t the only ones blindsided by FGMC’s behavior, as lender partners indicated that they were also left without updates on whether the company would purchase and fund loans that had already been approved for purchase. “I’m positive I am not alone when wondering ‘will you be honoring your commitment to purchase these loans, and when can we expect them to be purchased?’” wrote Dani Hernandez, vice president of mortgage at UpEquity in Austin, Texas. In her letter to FGMC, which was posted on LinkedIn, Hernandez indicated that the last communication UpEquity received from FGMC was two weeks ago, and the company was told that FGMC would “honor these locks and pricing.” “Now FGMC has gone radio silent,” Hernandez wrote. “Please let your lender partners know if we should be looking for other investors to sell these loans to or if and when you will be funding these loans you’ve committed to purchasing. “Leadership at FGMC, we understand this is a difficult time, but you owe it to your lender partners to let us know what is happening, so others do not suffer,” the letter concluded. While FGMC’s bankruptcy filing isn’t expected to affect closed mortgages, the company indicated that it has “taken action to accommodate the maximum number of borrowers who have started but not yet completed the loan process.” “FGMC is finalizing debtor-in-possession financing that will enable it to close and fund approved consumer loans under existing terms and conditions,” FGMC stated. The company also indicated that it identified one or more potential partners to provide optionality to support the pipeline of in-process loans. The debtor-in-possession financing still needs to be approved by the Court. The same applies to an “employee incentive and retention program” that FGMC is trying to develop. “As part of this process, the Company retained a portion of its workforce to manage the day-to-day business,” Samples said. “We are requesting that the court approve a variety of motions that will promote a smooth transition for all pertinent parties while also preserving value for the benefit of the Company’s stakeholders.” The post First Guaranty Mortgage Corp. Tacks on Massive Layoffs With Bankruptcy Filing appeared first on RISMedia......»»

Category: realestateSource: rismediaJul 1st, 2022

The One Housing Chart That Shows A "Buyer"s Market" Has Returned

The One Housing Chart That Shows A 'Buyer's Market' Has Returned The red hot pandemic-era housing market is cooling as historically tight available inventory shows signs of reversing.  An affordability crisis has removed millions of new home buyers as the number of active US listings soared 18.7% in June from a year earlier, the most significant increase in Realtor.com's data going back to 2017, according to Bloomberg. The days of insane bidding wars, waiving home inspections, and putting in an offer 20% or more over the list price appear to be over. In other words, a buyer's market could be emerging.  "While we anticipate that more inventory will eventually cool the feverish pace of competition, the typical buyer has yet to see meaningful relief from quick-selling homes and record-high asking prices," said Danielle Hale, chief economist for Realtor.com.  Austin, Texas; Phoenix, Arizona; and Raleigh, North Carolina saw active listings more than double from a year ago. Nashville, Tennessee, active listings jumped 86%, and 72% in the Riverside, California.  The Federal Reserve's most aggressive tightening campaign sent the 30-year fixed-loan mortgage rate from 3% to over 6% this year (back in March, we warned coming rate explosion would trigger a housing affordability crisis), removing millions of new home buyers who can't afford the cost of homeownership as the median existing-home sales price was around $407k in May.  Even though inventory is historically tight, supply is expected to increase in markets across the country as demand for loan applications among prospective buyers slumps. Fewer buyers equal more inventory.  The takeaway is that inventory is rising as homes stay on the market longer because demand evaporated thanks to the housing affordability crisis -- this could mean a housing top is nearing.  Tyler Durden Thu, 06/30/2022 - 18:50.....»»

Category: blogSource: zerohedgeJun 30th, 2022

These 46 pitch decks helped fintechs disrupting trading, investing, and banking raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. New twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series APersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalG 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionA trading app for activismAntoine Argouges, CEO and founder of TulipshareTulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundHelping small banks lendTKCollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed roundA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BAn alternative auto lenderTricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investors A new way to access credit The TomoCredit teamTomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingQuantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOSussing out bad actorsFrom left to right: Cofounders CTO David Movshovitz, CEO Doron Hendler, and chief architect Adi DeGaniRevealSecurityAn encounter with an impersonation hacker led Doron Hendler to found RevealSecurity, a Tel Aviv-based cybersecurity startup that monitors for insider threats.Two years ago, a woman impersonating an insurance-agency representative called Hendler and convinced him that he made a mistake with his recent health insurance policy upgrade. She got him to share his login information for his insurer's website, even getting him to give the one-time passcode sent to his phone. Once the hacker got what she needed, she disconnected the call, prompting Hendler to call back. When no one picked up the phone, he realized he had been conned.He immediately called his insurance company to check on his account. Nothing seemed out of place to the representative. But Hendler, who was previously a vice president of a software company, suspected something intangible could have been collected, so he reset his credentials."The chief of information security, who was on the call, he asked me, 'So, how do you want me to identify you? You gave your credentials; you gave your ID; you gave the one time password. How the hell can I identify that it's not you?' And I told him, 'But I never behave like this,'" Hendler recalled of the conversation.RevealSecurity, a Tel Aviv-based cyber startup that tracks user behavior for abnormalities, used this 27-page deck to raise its Series AA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series AHelping fintechs manage dataProper Finance co-founders Travis Gibson (left) and Kyle MaloneyProper FinanceAs the flow of data becomes evermore crucial for fintechs, from the strappy startup to the established powerhouse, a thorny issue in the back office is becoming increasingly complex.Even though fintechs are known for their sleek front ends, the back end is often quite the opposite. Behind that streamlined interface can be a mosaic of different partner integrations — be it with banks, payments players and networks, or software vendors — with a channel of data running between them. Two people who know that better than the average are Kyle Maloney and Travis Gibson, two former employees of Marqeta, a fintech that provides other fintechs with payments processing and card issuance. "Take an established neobank for example. They'll likely have one or two card issuers, two to three bank partners, ACH processing for direct deposits and payouts, mobile check deposits, peer-to-peer payments, and lending," Gibson told Insider. Here's the 12-page pitch deck a startup helping fintechs manage their data used to score a $4.3 million seed from investors like Redpoint Ventures and Y CombinatorE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series AShopify for embedded financeProductfy CEO and founder, Duy VoProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series ADeploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Branded cards for SMBsJennifer Glaspie-Lundstrom is the cofounder and CEO of Tandym.TandymJennifer Glaspie-Lundstrom is no stranger to the private-label credit-card business. As a former Capital One exec, she worked in both the card giant's co-brand partnerships division and its tech organization during her seven years at the company.Now, Glaspie-Lundstrom is hoping to use that experience to innovate a sector that was initially created in malls decades ago.Glaspie-Lundstrom is the cofounder and CEO of Tandym, which offers private-label digital credit cards to merchants. Store and private-label credit cards aren't a new concept, but Tandym is targeting small- and medium-sized merchants with less than $1 billion in annual revenue. Glaspie-Lundstrom said that group often struggles to offer private-label credit due to the expense of working with legacy players."What you have is this example of a very valuable product type that merchants love and their customers love, but a huge, untapped market that has heretofore been unserved, and so that's what we're doing with Tandym," Glaspi-Lundstrom told Insider.A former Capital One exec used this deck to raise $60 million for a startup helping SMBs launch their own branded credit cardsCatering to 'micro businesses'Stefanie Sample is the founder and CEO of FundidFundidStartups aiming to simplify the often-complex world of corporate cards have boomed in recent years.Business-finance management startup Brex was last valued at $12.3 billion after raising $300 million last year. Startup card provider Ramp announced an $8.1 billion valuation in March after growing its revenue nearly 10x in 2021. Divvy, a small business card provider, was acquired by Bill.com in May 2021 for approximately $2.5 billion.But despite how hot the market has gotten, Stefanie Sample said she ended up working in the space by accident. Sample is the founder and CEO of Fundid, a new fintech that provides credit and lending products to small businesses.This May, Fundid announced a $3.25 million seed round led by Nevcaut Ventures. Additional investors include the Artemis Fund and Builders and Backers. The funding announcement capped off the company's first year: Sample introduced the Fundid concept in April 2021, launched its website in May, and began raising capital in August."I never meant to do Fundid," Sample told Insider. "I never meant to do something that was venture-backed."Read the 12-page deck used by Fundid, a fintech offering credit and lending tools for 'micro businesses'Embedded payments for SMBsThe Highnote teamHighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingSpeeding up loans for government contractors OppZo cofounders Warren Reed and Randy GarrettOppZoThe massive market for federal government contracts approached $700 billion in 2020, and it's likely to grow as spending accelerates amid an ongoing push for investment in the nation's infrastructure. Many of those dollars flow to small-and-medium sized businesses, even though larger corporations are awarded the bulk of contracts by volume. Of the roughly $680 billion in federal contracts awarded in 2020, roughly a quarter, according to federal guidelines, or some $146 billion that year, went to smaller businesses.But peeking under the hood of the procurement process, the cofounders of OppZo — Randy Garrett and Warren Reed — saw an opportunity to streamline how smaller-sized businesses can leverage those contracts to tap in to capital.  Securing a deal is "a government contractor's best day and their worst day," as Garrett, OppZo's president, likes to put it."At that point they need to pay vendors and hire folks to start the contract. And they may not get their first contract payment from the government for as long as 120 days," Reed, the startup's CEO,  told Insider. Check out the 12-page pitch deck OppZo, a fintech that has figured out how to speed up loans to small government contractors, used to raise $260 million in equity and debtHelping small businesses manage their taxesComplYant's founder Shiloh Jackson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersAutomating accounting ops for SMBsDecimal CEO Matt Tait.DecimalSmall- and medium-sized businesses can rely on any number of payroll, expense management, bill pay, and corporate-card startups promising to automate parts of their financial workflow. Smaller firms have adopted this corporate-financial software en masse, boosting growth throughout the pandemic for relatively new entrants like Ramp and massive, industry stalwarts like Intuit. But it's no easy task to connect all of those tools into one, seamless process. And while accounting operations might be far from where many startup founders want to focus their time, having efficient back-end finances does mean time — and capital — freed up to spend elsewhere. For Decimal CEO Matt Tait, there's ample opportunity in "the boring stuff you have to do to survive as a company," he told Insider. Launched in 2020, Decimal provides a back-end tech layer that small- and medium-sized businesses can use to integrate their accounting and business-management software tools in one place.On Wednesday, Decimal announced a $9 million seed fundraising round led by Minneapolis-based Arthur Ventures, alongside Service Providers Capital and other angel investors. See the 13-page pitch deck for Decimal, a startup automating accounting ops for small businessesInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now co-foundersNowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionCheckout made easyRyan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DPayments infrastructure for fintechsQolo CEO and co-founder Patricia MontesiQoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ABetter use of payroll dataAtomic's Head of Markets, Lindsay DavisAtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounderGleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPOAgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionInsurance goes digitalJamie Hale, CEO and cofounder of LadderLadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionData science for commercial insuranceTanner Hackett, founder and CEO of CounterpartCounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in fundingDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysSoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalPay-as-you-go compliance for banks, fintechs, and crypto startupsNeepa Patel, Themis' founder and CEOThemisWhen Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms. Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software. But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup."It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."Check out the 9-page pitch deck Themis, which offers pay-as-you-go compliance for banks, fintechs, and crypto startups, used to raise $9 million in seed fundingConnecting startups and investorsHum Capital cofounder and CEO Blair SilverbergHum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Helping LatAm startups get up to speedKamino cofounders Gut Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo ParejoKaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed roundThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionRead the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 30th, 2022

Why The Housing Bubble Bust Is Baked-In

Why The Housing Bubble Bust Is Baked-In Authored by Charles Hugh Smith via OfTwoMinds blog, Putting this all together, it's clear that the source of the current housing bubble is the explosion of financial speculation fueled by central bank policies. Those benefiting from speculative bubbles have powerful incentives to deny the bubble can bust. Rationalizations abound as bubbles inflate, and the continued ascent of speculative bets seems to "prove" the rationalizations are correct. But bubbles arise from speculative excesses, and once these reach extremes and reverse, bubbles burst and all the self-serving rationalizations are revealed as rationalizations. Let's start with some caveats I've already covered in Is Housing a Bubble That's About to Crash? (May 2, 2022): 1. Housing is local, so there may be locales where prices are still rising due to unquenchable demand and low supply and other places where demand is low and supply ample where prices plummet. 2. The wealthiest 1% on a global scale is a very large number, and wealthy buyers seeking a safe haven in North America come with cash and don't care about mortgage rates. Desirable enclaves could see home prices climb even as the national bubble pops. (World population: 7.8 billion X 1% = 78,000.000 or roughly 30,000,000 households.) 3. Wealthy investors are holding a large number of dwellings off the market as investments. These empty units consequentially reduce the supply in desirable locales, and create an artificial scarcity that would not exist if central banks hadn't inflated the Everything Bubble. 4. The number of homes bought by corporations has soared. This has driven demand in many markets, but if rents dive due to recession, corporate buyers become corporate sellers. With those caveats out of the way, let's look at the foundation of home ownership for the bottom 95%: income and mortgage rates. As mortgage rates rise, more income must be devoted to the monthly payment. If household income lags the increase in housing prices, price eventually exceed what the bottom 95% can afford once mortgage rates rise. The first chart below is the national Case-Shiller Index.  Note that housing prices have soared 63.6% since the previous housing bubble peak in 2007, outpacing inflation (up 41%) and median household income (up 34%), the second chart. The third chart shows mortgage rates have broken out of a 37-year downtrend. It is noteworthy that mortgage rates were in the 7% to 8% range in previous economic booms (late 1960s, the 1990s) but now 6% mortgages are considered the end of the world. That suggests a dependence on cheap money / low rates is the primary support of the current bubble rather than an organic economic expansion such as we enjoyed in the 1990s. Courtesy of my colleague CH at Econimica, the next three charts shed light on housing fundamentals. The first Econimica chart shows the rate of growth in population, employment and housing units. The U.S. population increased by a scant 1.5 million since 2019, the number of employed was flat and the number of housing units increased by 2.8 million. The second Econimica chart shows the Fed Funds Rate (FFR), the staggering increase of mortgage-backed securities purchased by the Federal Reserve to keep mortgage rates low (from zero to $2.7 trillion), declining rate of population growth year-over-year and the remarkable rise in the number of housing units under construction. The third Econimica chart shows housing units per capita (per person), which has reached the same level as the previous housing bubble peak in 2007-08. As CH observed: "Housing units (per capita) against US population should suggest not a shortage of housing units but a surplus of dollars with which to buy them." Putting this all together, it's clear that the source of the current housing bubble is the explosion of financial speculation fueled by central bank policies. Housing prices that far exceed the growth of household incomes are not sustainable, and neither are housing prices that rose solely on the basis of unprecedentedly low mortgage rates. It's also clear that those with access to the (temporary) wealth created by central banks' trillions in new credit have poured many of these "free money" trillions into housing globally as a hedge against inflation, a safe-haven investment or for corporations, for rental income. All of these factors exacerbate an artificial demand and equally artificial scarcity. As I've noted in the past, bubbles typically manifest a symmetry in their ascent and decline. All the gains are eventually reversed, and if the system is destabilized by the bubble bust, then prices drop far below previous lows. Setting aside rationalizations in favor of fundamentals, the housing bubble's bust is already baked in. *  *  * My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Tyler Durden Thu, 06/30/2022 - 11:39.....»»

Category: personnelSource: nytJun 30th, 2022

Key Words: Wells Fargo CEO Charles Scharf: ‘Real-estate values moderating in the long term are a good thing’

Scharf said his company was experiencing a 'huge decline' in mortgage applications......»»

Category: topSource: marketwatchJun 30th, 2022

Mortgage Applications Continue to Increase

Mortgage applications continued to increase this week, rising 0.7% from one week earlier, according to latest data from the Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending June 24, 2022. This week’s results include an adjustment for the observance of the Juneteenth holiday. Key findings from the survey: The… The post Mortgage Applications Continue to Increase appeared first on RISMedia. Mortgage applications continued to increase this week, rising 0.7% from one week earlier, according to latest data from the Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending June 24, 2022. This week’s results include an adjustment for the observance of the Juneteenth holiday. Key findings from the survey: The Market Composite Index, a measure of mortgage loan application volume, increased 0.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 20% compared with the previous week. The Refinance Index increased 2% from the previous week and was 80% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1% from one week earlier. The unadjusted Purchase Index decreased 21 % compared with the previous week and was 24 % lower than the same week one year ago. The refinance share of mortgage activity increased to 30.3% of total applications from 29.7% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 10.1% of total applications. The FHA share of total applications remained unchanged at 12.0% from the week prior. The VA share of total applications increased to 11.2% from 10.7% the week prior. The USDA share of total applications increased to 0.6% from 0.5 % the week prior. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.84% from 5.98%, with points decreasing to 0.64 from 0.77 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 5.42% from 5.49%, with points decreasing to 0.28 from 0.45 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained at 5.62%, with points decreasing to 1.15 from 1.18 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.06% from 5.05%, with points decreasing to 0.72 from 0.86 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week. The average contract interest rate for 5/1 ARMs decreased to 4.64% from 4.78%, with points decreasing to 0.72 from 0.84 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week. What the data means: “Mortgage rates continue to experience large swings. After increasing 65 basis points during the past three weeks, the 30-year fixed rate declined 14 basis points last week to 5.84%. Rates are still significantly higher than they were a year ago, when the 30-year fixed rate was at 3.2%,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “The decline in mortgage rates led to a slight increase in refinancing, driven by an uptick in conventional loans. However, refinances are still 80% lower than a year ago and more than 60 % below the historical average.” Added Kan, “Overall purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices, and growing economic uncertainty. Purchase applications were essentially flat last week but were supported by a 6% increase in government loans. The average purchase loan amount declined to $413,500, which is an ongoing downward trend since it hit a record $460,000 in March 2022.” The post Mortgage Applications Continue to Increase appeared first on RISMedia......»»

Category: realestateSource: rismediaJun 29th, 2022

Case-Shiller Home Prices Soared By Record In April, But...

Case-Shiller Home Prices Soared By Record In April, But... With home sales weakening across the nation (while mean home prices are surging relative to median, signaling higher-end homes dominating the sales) and homebuilder sentiment slumping, this morning's Case-Shiller (newly minted S&P CoreLogic CS) home price index data unexpectedly accelerated even higher.  The latest data is from April and shows the 20-City Composite surging 1.77% MoM (less than the 1.90% expected) BUT surging by a record 21.23% YoY (more than the +21.05% expected). Source: Bloomberg "April 2022 showed initial (although inconsistent) signs of a deceleration in the growth rate of U.S. home prices," Craig J. Lazzara, managing director at S&P Dow Jones Indices, said in statement. "Despite the deceleration of the National Composite and the modest acceleration for the 10- and 20-City Composites, these growth rates are extremely strong by historical standards – at or above the 99th percentile in all three cases." BUT... as a reminder, the Case-Shiller data is lagged and smoothed, so things likely got a lot more 'complicated' since this April data as mortgage rates spiked and mortgage applications collapsed... Source: Bloomberg Tampa, Miami, Phoenix reported highest year-over-year gains among 20 cities surveyed "In contrast with the past five months, when prices in most cities accelerated, in April only nine cities saw prices rise faster than they had done in March," he said. "There’s a regional pattern among the nine, as all five cities in our South composite (Atlanta, Charlotte, Dallas, Miami, and Tampa) are represented there." Maybe it is time for Mr.Powell to get back to work after all. This is not the less-flation he is hoping for. Tyler Durden Tue, 06/28/2022 - 09:07.....»»

Category: blogSource: zerohedgeJun 28th, 2022

US Pending Home Sales Unexpectedly Rise In May, NAR Warns Housing Market "Transition" Underway

US Pending Home Sales Unexpectedly Rise In May, NAR Warns Housing Market "Transition" Underway After an unexpected jump in new home sales and larger than expected drop in existing home sales, today's pending home sales print is the tie-breaker for sentiment in the housing market in May as homebuilder sentiment soured and mortgage rates and applications soared. As it turns out pending home sales unexpectedly rose 0.7% MoM in May (versus a 4.0% MoM expected drop) and with a downward revision to April from -3.9% MoM to -4.0% MoM... Source: Bloomberg This ends a 6 month streak of declines and some wondered if the brief drop in mortgage rates during May could have sparked the modest rebound (of course, as we show below, rates soared since). “Despite the small gain in pending sales from the prior month, the housing market is clearly undergoing a transition,” NAR’s chief economist Lawrence Yun said in a statement. Pending home sales are still down around 12% YoY... Source: Bloomberg The NAR noted that at the median single-family home price and with a 10% down payment, the monthly mortgage payment has increased by about $800 since the beginning of the year. By region, contract signings in the Northeast and South rose, while those in the Midwest and West declined, NAR said. All four areas were down from a year ago. And finally, bear in mind that this is May's data, the fecal matter hit the rotating object even more in June... Source: Bloomberg Will the growth scare narrative win and limit the pain from here or will Powell reinforce the inflation-fighting narrative and send rates higher still... and affordability even lower. Tyler Durden Mon, 06/27/2022 - 10:06.....»»

Category: blogSource: zerohedgeJun 27th, 2022

Mortgage Applications Increase Amid Ongoing Rate Hikes

Despite rising mortgage rates, mortgage applications increased 4.2% from one week earlier, according to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2022. Here are the key points from the survey: The Market Composite Index, a measure of mortgage loan application volume, increased 4.2%… The post Mortgage Applications Increase Amid Ongoing Rate Hikes appeared first on RISMedia. Despite rising mortgage rates, mortgage applications increased 4.2% from one week earlier, according to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2022. Here are the key points from the survey: The Market Composite Index, a measure of mortgage loan application volume, increased 4.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3% compared with the previous week. The Refinance Index decreased 3% from the previous week and was 77% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8% from one week earlier. The unadjusted Purchase Index increased 6% compared with the previous week and was 10% lower than the same week one year ago. The refinance share of mortgage activity decreased to 29.7% of total applications from 31.7% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 10.6% of total applications. The FHA share of total applications increased to 12.0% from 11.8% the week prior. The VA share of total applications decreased to 10.7% from 11.7% the week prior. The USDA share of total applications decreased to 0.5% from 0.6% the week prior. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.98% from 5.65%, with points increasing to 0.77 from 0.71 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.49% from 5.25%, with points decreasing to 0.45 from 0.54 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.62% from 5.36%, with points increasing to 1.18 from 1.00 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.05% from 4.79%, with points increasing to 0.86 from 0.80 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. The average contract interest rate for 5/1 ARMs increased to 4.78% from 4.57%, with points increasing to 0.84 from 0.80 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. What the data means: “Mortgage rates continued to surge last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98%—the highest since November 2008 and the largest single-week increase since 2009. All other loan types also increased by at least 20 basis points, influenced by the Federal Reserve’s 75-basis-point rate hike and commentary that more are coming to slow inflation,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Mortgage rates are now almost double what they were a year ago, leading to a 77% drop in refinance volume over the past 12 months.” Added Kan, “Purchase applications increased for the second straight week—driven mainly by conventional applications—and the ARM share of applications jumped back to over 10%. However, purchase activity was still 10% lower than a year ago, as inventory shortages and higher mortgage rates are dampening demand. The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating.” The post Mortgage Applications Increase Amid Ongoing Rate Hikes appeared first on RISMedia......»»

Category: realestateSource: rismediaJun 23rd, 2022

KB Home Q2 Earnings Preview: What Can Be Expected?

Now that the Fed has been cranking borrowing rates in an attempt to bring inflation down, it has landed homebuilders in a unique situation. If anything is certain, it’s that the 2022 Q1 earnings season was one for the books. We witnessed nasty sell-offs following many companies’ quarterly results, undoubtedly not the typical reactions we generally see during earnings season.  Margin compression was widespread as companies struggled to keep pace with rising costs associated with energy, freight, labor, and geopolitical issues. Simply put, we’ve found ourselves in a highly unique economic situation coming out of a once-in-a-lifetime pandemic.Now that the Fed has been cranking borrowing rates in an attempt to bring inflation down, it has landed homebuilders in a unique situation. Earlier this week, we received quarterly results from one of these companies, Lennar LEN.Of course, homebuilder stocks are in the spotlight whenever the Fed becomes more hawkish, raising interest rates as they have done. As borrowing rates increase, so do mortgage rates, affecting mortgage demand.Interestingly, mortgage applications increased just last week, witnessing a spike in demand.Considering that the fixed 30-year mortgage rate has risen from 3.11% at the end of December 2021 to 5.78% in the week ending Thursday, June 16th, the demand spike seems somewhat mysterious on a surface level.  However, one explanation that may be a root cause for the spike in demand is potential homebuyers are forecasting even higher rates in the upcoming months and attempting to lock in rates as soon as possible. After all, mortgage rates have skyrocketed recently and climbed to the highest levels we’ve seen in a decade and a half.  Nonetheless, it’s a fascinating development with extreme, widespread effects on the economy.On deck to release quarterly results after the bell rings today is another homebuilder, KB Home KBH. Let’s closely examine Lennar’s quarterly results to get a feel for what to expect from KBH.Lennar Quarterly ResultsTo a slight surprise, Lennar reported strong quarterly results, beating on the top and bottom lines. The company posted quarterly EPS of $4.69, enough to beat the Zacks Consensus Estimate of $3.95 per share by a substantial 19%.Regarding quarterly revenue, quarterly sales of $8.4 billion was enough to beat estimates of $8.1 billion by a notable 3% and pencil in a 30% increase from the year-ago quarter.  Homebuilding operating earnings increased to $1.9 billion, compared to operating earnings of $1.1 billion. Gross margin on home sales improved 340 basis points to 29.5%.The company’s total deliveries increased 14% to 16,500 homes, and new orders increased 4% to 17,800 homes – both compared to the year-ago quarter.All in all, on a surface level, it was a strong quarter for the company.However, Stuart Miller, Executive Chairman, said, “While our second-quarter results demonstrate strength and excellent performance throughout the quarter, the weight of a rapid doubling of interest rates over six months, together with accelerated price appreciation, began to drive buyers in many markets to pause and reconsider. We began to see these effects after quarter-end.”Lennar has yet to notice a frightening pullback in demand, potentially because the unemployment rate has fallen significantly, providing consumers the ability to spend. Moving forward, the company gave broad guidance for Q3, citing that the Fed’s actions are still quite “fluid” and “responsive” to inflation data. If anything, it seems that the next few quarters will be where these homebuilders feel the most pain.Let’s move on to projections for KBH.KB HomeYear-to-date, KBH shares have been tossed aroud, declining 42% in value and vastly underperforming the general market.Image Source: Zacks Investment ResearchFor the quarter, the Zacks Consensus EPS Estimate sits at $1.97, marking a substantial 32% growth in earnings from the year-ago quarter. Over the last 60 days, one analyst has lowered their quarterly earnings outlook and has been the only analyst to revise their estimate.Quarterly revenue estimates reside at $1.6 billion, an 11.5% increase in the top-line from year-ago quarterly sales of $1.4 billion.The company missed on the bottom-line by 3.3% in its latest quarterly report but has beat quarterly EPS estimates by 5.6%, on average, over the last four quarters.If Lennar’s quarterly results indicate what’s to come for KBH, it seems that things are shaping up to be a strong quarter. However, pain may be felt in the upcoming quarters.KBH is currently a Zacks Rank #4 (Sell).Bottom LineThe housing market is in a very unique situation as of right now, and it looks as if the pain will start to hit homebuilders later in the year, in Q3 and Q4. Lennar posted strong quarterly results but gave very concerning and vague guidance for the rest of the year.Additionally, Lennar noted that increasing interest rates and rising house costs started to steer away buyers near the end of the quarter, another concerning development.Currently, I believe investors should heed caution in the homebuilding industry – aspects of this industry are starting to show signs of softening. Additionally, homebuilder stocks underwent adverse price action after a few real estate firms announced job cuts last week.  KBH carrying a Zacks Rank #4 (Sell) is another reason investors should heed caution with this stock. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KB Home (KBH): Free Stock Analysis Report Lennar Corporation (LEN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 22nd, 2022

These 44 pitch decks helped fintechs disrupting trading, investing, and banking raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. New twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series APersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalG 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionA trading app for activismAntoine Argouges, CEO and founder of TulipshareTulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundHelping small banks lendTKCollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed roundA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BAn alternative auto lenderTricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investors A new way to access credit The TomoCredit teamTomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingQuantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series AHelping fintechs manage dataProper Finance co-founders Travis Gibson (left) and Kyle MaloneyProper FinanceAs the flow of data becomes evermore crucial for fintechs, from the strappy startup to the established powerhouse, a thorny issue in the back office is becoming increasingly complex.Even though fintechs are known for their sleek front ends, the back end is often quite the opposite. Behind that streamlined interface can be a mosaic of different partner integrations — be it with banks, payments players and networks, or software vendors — with a channel of data running between them. Two people who know that better than the average are Kyle Maloney and Travis Gibson, two former employees of Marqeta, a fintech that provides other fintechs with payments processing and card issuance. "Take an established neobank for example. They'll likely have one or two card issuers, two to three bank partners, ACH processing for direct deposits and payouts, mobile check deposits, peer-to-peer payments, and lending," Gibson told Insider. Here's the 12-page pitch deck a startup helping fintechs manage their data used to score a $4.3 million seed from investors like Redpoint Ventures and Y CombinatorE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series AShopify for embedded financeProductfy CEO and founder, Duy VoProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series ADeploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Branded cards for SMBsJennifer Glaspie-Lundstrom is the cofounder and CEO of Tandym.TandymJennifer Glaspie-Lundstrom is no stranger to the private-label credit-card business. As a former Capital One exec, she worked in both the card giant's co-brand partnerships division and its tech organization during her seven years at the company.Now, Glaspie-Lundstrom is hoping to use that experience to innovate a sector that was initially created in malls decades ago.Glaspie-Lundstrom is the cofounder and CEO of Tandym, which offers private-label digital credit cards to merchants. Store and private-label credit cards aren't a new concept, but Tandym is targeting small- and medium-sized merchants with less than $1 billion in annual revenue. Glaspie-Lundstrom said that group often struggles to offer private-label credit due to the expense of working with legacy players."What you have is this example of a very valuable product type that merchants love and their customers love, but a huge, untapped market that has heretofore been unserved, and so that's what we're doing with Tandym," Glaspi-Lundstrom told Insider.A former Capital One exec used this deck to raise $60 million for a startup helping SMBs launch their own branded credit cardsCatering to 'micro businesses'Stefanie Sample is the founder and CEO of FundidFundidStartups aiming to simplify the often-complex world of corporate cards have boomed in recent years.Business-finance management startup Brex was last valued at $12.3 billion after raising $300 million last year. Startup card provider Ramp announced an $8.1 billion valuation in March after growing its revenue nearly 10x in 2021. Divvy, a small business card provider, was acquired by Bill.com in May 2021 for approximately $2.5 billion.But despite how hot the market has gotten, Stefanie Sample said she ended up working in the space by accident. Sample is the founder and CEO of Fundid, a new fintech that provides credit and lending products to small businesses.This May, Fundid announced a $3.25 million seed round led by Nevcaut Ventures. Additional investors include the Artemis Fund and Builders and Backers. The funding announcement capped off the company's first year: Sample introduced the Fundid concept in April 2021, launched its website in May, and began raising capital in August."I never meant to do Fundid," Sample told Insider. "I never meant to do something that was venture-backed."Read the 12-page deck used by Fundid, a fintech offering credit and lending tools for 'micro businesses'Embedded payments for SMBsThe Highnote teamHighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingHelping small businesses manage their taxesComplYant's founder Shiloh Jackson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersAutomating accounting ops for SMBsDecimal CEO Matt Tait.DecimalSmall- and medium-sized businesses can rely on any number of payroll, expense management, bill pay, and corporate-card startups promising to automate parts of their financial workflow. Smaller firms have adopted this corporate-financial software en masse, boosting growth throughout the pandemic for relatively new entrants like Ramp and massive, industry stalwarts like Intuit. But it's no easy task to connect all of those tools into one, seamless process. And while accounting operations might be far from where many startup founders want to focus their time, having efficient back-end finances does mean time — and capital — freed up to spend elsewhere. For Decimal CEO Matt Tait, there's ample opportunity in "the boring stuff you have to do to survive as a company," he told Insider. Launched in 2020, Decimal provides a back-end tech layer that small- and medium-sized businesses can use to integrate their accounting and business-management software tools in one place.On Wednesday, Decimal announced a $9 million seed fundraising round led by Minneapolis-based Arthur Ventures, alongside Service Providers Capital and other angel investors. See the 13-page pitch deck for Decimal, a startup automating accounting ops for small businessesInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now co-foundersNowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionCheckout made easyRyan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DPayments infrastructure for fintechsQolo CEO and co-founder Patricia MontesiQoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ABetter use of payroll dataAtomic's Head of Markets, Lindsay DavisAtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounderGleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPOAgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionInsurance goes digitalJamie Hale, CEO and cofounder of LadderLadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionData science for commercial insuranceTanner Hackett, founder and CEO of CounterpartCounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in fundingDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysSoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalPay-as-you-go compliance for banks, fintechs, and crypto startupsNeepa Patel, Themis' founder and CEOThemisWhen Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms. Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software. But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup."It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."Check out the 9-page pitch deck Themis, which offers pay-as-you-go compliance for banks, fintechs, and crypto startups, used to raise $9 million in seed fundingConnecting startups and investorsHum Capital cofounder and CEO Blair SilverbergHum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Helping LatAm startups get up to speedKamino cofounders Gut Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo ParejoKaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed roundThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionRead the original article on Business Insider.....»»

Category: personnelSource: nytJun 22nd, 2022

A kind of mortgage that helped cause the 2008 housing crash is surging in popularity. Here"s why it"s different this time.

The previous housing crash was triggered, in part, by adjustable rate mortgages. Experts say the mortgage industry is in a more solid place today. According to the Mortgage Bankers Association, applications for ARMs have now reached the highest level since 2008 – a fourteen-year high – and are expected to continue rising.jhorrocks/Getty Images Adjustable-rate mortgages are surging in popularity despite their role in the 2008 housing crash. But their re-emergence is no cause to worry as lending standards have since tightened. Experts say the mortgage industry is in a safer space today for both borrowers and lenders. A mortgage product that helped trigger the 2008 housing crash is becoming popular again— but this time it's different.Adjustable-rate mortgages — also known as ARMs — are home loans with an interest rate that adjusts over time depending on the fluctuation of market rates. They're less predictable than fixed-mortgages as they tend to change periodically and are considered risky as borrowers run the chance of paying much higher mortgage payments than they may have originally budgeted. "Adjustable rate mortgages aren't inherently bad but the large share of borrowers during the last cycle with these loans caused problems," Ali Wolf, the chief economist for Zonda, a homebuilding prop tech company, told Insider. "During the mid-2000s housing boom, roughly 35% of all mortgages were adjustable rate. This meant that when interest rates reset, there were a lot of homeowners unable to service their new monthly mortgage payment." In the Covid-19 housing market, ARMs have regained momentum as the Federal Reserve's rate hikes put upward pressure on mortgage rates. According to the Mortgage Bankers Association, applications for ARMs reached a fourteen-year high in May– and are expected to continue rising.  "More borrowers continue to utilize ARMs to combat higher rates," Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement.This growth has some people worried as ARMs played a key role in the 2008 housing crash. In the period that led up to the implosion, many subprime lenders enticed borrowers with interest-only ARMs that initially sported low rates. When rates began to soar, it created an affordability crisis that pushed many borrowers into foreclosure. Although ARMs reemergence is causing whiplash — there's no need to fret in 2022. Lending standards have tightened and that means today's borrowers aren't walking through a financial minefield. "The mortgage market has shifted dramatically since 2008," Jude Landis, vice president of single-family risk management at Fannie Mae, said in a statement. "Improvements in underwriting, technology, and quality controls – some visible, some less so – have resulted in a fundamentally sounder mortgage system than before the crisis of 2008."Lending standards have tightened since 2008The new ARM comes equipped with a whole new set of underwriting guidelines that make it harder for borrowers to end up in foreclosure — and it's thanks to the Dodd-Frank Act.The Act was created as a direct response to the financial crisis of 2008. It's hyper-focused on addressing sectors of the financial system that contributed to the economic turmoil, including the banking, lending and credit industries.As subprime mortgage lenders faced a significant share of the blowback from the crisis, Congress aimed to regulate the industry by building new protections like the Consumer Financial Protection Bureau, which supports the financial interests of borrowers. Additionally, regulations like the ability-to-repay and qualified mortgage rules placed stricter guidelines on lenders. Although some of the Dodd-Frank Act has been rolled back, today's financial sectors are in a much healthier place than the Wild West of 2008. This means borrowers are better protected from the predatory lending practices that put the housing market in hot water years ago. "Lenders have strengthened their mortgage origination processes, including improved underwriting and collateral assessment," Landis said. "Additionally, appropriate regulations, such as the ability-to-repay and qualified mortgage rules, have formed guardrails for mortgage lending standards that did not exist 10 years ago."According to Landis, the mortgage industry has evolved into a fundamentally healthier space for both borrowers and lenders —  and that means ARMs comeback is no cause for worry.Read the original article on Business Insider.....»»

Category: worldSource: nytJun 21st, 2022

Investment banks are sounding the recession alarm — and Main Street is starting to fret about economic slowdown as well

Consumer sentiment polls plummeted as Wall Street banks warned that the Fed's latest interest rate hikes could lead to a recession. Investors are starting to fret about a potential recession - and Main Street seems to agree, with consumer sentiment plunging this week.Justin Sullivan/Getty Images Morgan Stanley, UBS and Wells Fargo all said that a recession became more likely last week. Ordinary Americans seem to agree, with consumer sentiment polls plummeting. The Federal Reserve is hiking interest rates to curb inflation - but that could slow down growth. One word dominated Wall Street's coverage of last Wednesday's Federal Reserve meeting: recession.Equity chiefs like Morgan Stanley's Mike Wilson, economists like Wells Fargo's Jay Bryson, and billionaire investors like Leon Cooperman all warned this week that an economic downturn is becoming more likely."[Rising rates] raises the risk of a recession, because you're bringing rate hikes forward even faster," Wilson told CNBC's 'Closing Bell' last week. "The Fed is hiking into a slowdown, and they don't really have a lot of options."The Fed is hiking interest rates as it looks to tackle soaring inflation. But there's every risk that the resulting economic contraction tips the US into a recession — typically defined as two consecutive quarters of negative growth, accompanied by a rise in unemployment and a sharp slowdown in business activity.UBS became the latest bank to predict an economic downturn Friday."The more aggressive line by central banks adds to headwinds for both economic growth and equities," the Swiss bank's chief investment officer Mark Haefele said. "The risks of a recession are rising, while achieving a soft landing for the US economy appears increasingly challenging."And away from Wall Street, ordinary Americans are starting to fret about the economy as well.The Michigan Consumer Sentiment Index, which measures Main Street's attitude towards the overall business climate, fell sharply to a record low of 50.2 points this month, far below analysts' initial prediction of 58."The crash in sentiment means that consumers are more and more worried about future economic conditions," LPL Financial's chief economist Jeffrey Roach said. "Recession risks are rising for next year, especially if high prices get entrenched in the economy."Consumer sentiment has typically been used as a gauge of future consumer spending, which accounts for roughly three quarters of gross domestic product.Sliding consumer sentiment has coincided with dire numbers coming out of the retail sector, meaning Americans are spending much less at stores and restaurants as inflation soars. Consumers tend to spend less and save more when they're worried about the overall state of the economy, as evidenced by a slump in mortgage applications.And investment bankers can learn a lot from how Main Street feels about the economy, according to LPL's Roach."We need to listen to what consumers say," he said. "But more importantly, we need to watch what consumers do."Read more: Avoiding a recession would be a 'pleasant surprise' as risks to the economy mount and the housing market starts to weaken, says a portfolio manager who's beaten 89% of peers this year — but these 5 cheap groups of stocks should thrive anywayRead the original article on Business Insider.....»»

Category: dealsSource: nytJun 20th, 2022

The Housing Market Is Complicated

Demand is shrinking but prices may not come down. Yesterday, I was talking about how companies would be cutting back production if demand started to shrink. And today, I want to talk about the housing market where we are already seeing it happen.According to the latest available data, new home sales dropped 16.6% in April, mainly driven by the higher cost of construction (that is being passed on to consumers). Existing home sales are also coming down (-2.4% in April) as prices remain elevated and mortgage rates continue to climb.One would have expected less caution from homebuilders given the significant demographic-driven demand out there and people only staying away from the market because of the high prices. Nor is there any possibility of inventories piling up if prices are lowered, given the strength of underlying demand.But builders don’t seem to be in the mood to take risk. One reason could be the persistent cost escalation, both in terms of raw material and labor. Whether they will be willing to build inventory once the supply chain normalizes and the labor market cools (somewhat at least) is anybody’s guess. Since oil and gasoline prices aren’t expected to soften much, it doesn’t look likely to happen any time soon.Builders could also be factoring in much weaker demand over the next couple of years as a result of the rate hikes. Maintaining lower inventories would allow them to collect better prices. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index certainly seems to be rising to the occasion (pun intended). Between Jan 2021 and March 2022, there has not been so much as a pause, with price increases actually accelerating in the first three months of this year.Now let’s take a look at a couple of charts. Housing market data comes from a number of places, including the Census Bureau, the HUD and the National Association of Realtors to name a few, and they are released at different times and for different periods, all of which makes the data a little difficult to correlate. But the trend lines still tell the story:Image Source: Zacks Investment ResearchAs evident from the above, new home sales (green line) flatlined between Dec 2021 and Feb 2022 before dipping lower.The inventory position (red line) also flattened in these three months and increased ever so slightly since.Housing starts (blue line) that had been buoyant since October, dropped sharply in May. As starts were holding relatively steady up to April, inventory increased slightly. But with starts dropping off so sharply in May, inventory increases could be checked even if demand falls further.And finally, existing home sales (orange line), which make up a significantly higher share of home sales, also continue to trend lower.The effect of increasing mortgage rates on demand is seen in the chart below:Image Source: Zacks Investment ResearchAs is clear from the above, the 30-year mortgage rate (green line) has been rising quite consistently from Feb 2022. Mortgage applications (orange line) have been mostly in negative territory. Last week’s spike was likely in order to get in before the Fed’s rate hike announcement this week.ConclusionThis creates a peculiar problem. While rate hikes are designed to cut consumption, the end goal is to have inventories build up so prices can come down. But home builders are reacting quickly to the slight inventory increase, which is keeping prices high. Prices in the housing market really need to come down because they are the most significant factor in fighting inflation in the core basket (minus food and energy).If this continues, and production continues to shrink, it could send us into a recession.Better BuyBecause of the above situation, it’s probably a good idea to avoid homebuilders right now. Safer bets are diversified chemicals suppliers Brenttag SE BNTGY and Kronos Worldwide, Inc. KRO, steel producers Nucor Corp. NUE and Ryerson Holding Corp. RYI, as well as Daqo New Energy Corp DQ. Sporting Zacks Ranks of #1 (Strong Buy) or #2 (Buy) and value-growth-momentum (VGM) Scores of A or B, these stocks belong to happening industries. So they have better chances of appreciation. Additionally, analysts are also positive about them, as evidenced by their recent estimate revisions. Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Nucor Corporation (NUE): Free Stock Analysis Report Kronos Worldwide Inc (KRO): Free Stock Analysis Report DAQO New Energy Corp. (DQ): Free Stock Analysis Report Ryerson Holding Corporation (RYI): Free Stock Analysis Report Brenntag AG (BNTGY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 17th, 2022

5 Top Stocks to Buy on Robust Wood Industry Trends

The Zacks Building Products - Wood industry is gaining from higher demand arising from home improvement activities and the export market. Industry players WY, RYN, LPX, UFPI and BCC are set to gain the most from the demand surge. The Zacks Building Products – Wood industry is expected to benefit from higher demand across export markets, accelerated repair and remodel (R&R) activity and more funding for carbon/ESG-related projects despite continuous supply-chain woes and lower lumber prices. In addition, inorganic and prudent cost-containment moves should lend support to industry players like Weyerhaeuser Company WY, Rayonier Inc. RYN, Louisiana-Pacific Corporation LPX, UFP Industries, Inc. UFPI and Boise Cascade Company BCC.Industry DescriptionThe Zacks Building Products – Wood industry includes forest product companies and manufacturers of lumber as well as other wood products that are used in home construction, repair and remodeling along with the development of outdoor structures. Companies in the industry design, manufacture, source, and sell flooring products like tile, wood, laminate, vinyl, and natural stone flooring products as well as decorative and installation accessories. The industry players are also involved in the manufacturing and distribution of wood and plastic composite products along with related accessories, mainly for residential decking and railing applications. The industry also includes timberland real estate investment trusts or REITs.3 Trends Shaping the Future of Building Products - Wood IndustryHigher Export Market Demand, More Spending on Carbon/ESG Projects & Repair & Remodeling Markets: The industry participants have been experiencing higher demand across export markets owing to the combination of diverse factors. For example, shipping and logistics challenges are pushing up the demand for North American logs in Japan. Again, trade limitations have impacted the import of Australian logs in China. Meanwhile, the Russia-Ukraine war has led to the ban of log exports from Russia. Overall, this tightening global wood market is proving conducive for some of the industry participants. Meanwhile, the companies are experiencing higher funding for carbon/ESG-related projects to pursue carbon capture and storage work. The industry’s prospects are highly correlated with the U.S. housing market conditions. Although the slowing housing market and the pandemic-related challenges are creating hurdles, the repair and remodeling or R&R market (considered one of the largest in terms of lumber demand) has been going strong. Currently, lower lumber prices are creating an opportunity to perform renovations or DIY projects, thereby aiding the wood industry participants. Also, increased government spending on infrastructure projects bodes well.Acquisitions, Product Innovation & Efficient Cost-Reduction Strategies: The companies also bank on acquisitions and divestitures to expand as well as improve portfolio quality. New products continue to be an important top-line driver for the industry players. Also, efforts to introduce products are likely to have helped the players. Again, in a bid to reduce costs, companies have been reducing the cost structure of their facilities through Lean Six Sigma efforts, sale or shutdown of underperforming units and manufacturing facilities as well as investments in technology. Also, the industry players have been focusing on operational excellence, comprising merchandising for value, harvest, and transportation efficiencies, and flexing harvest to capture seasonal and short-term opportunities.Rapid Lumber Market Swings & Supply Chain-Related Challenges Weigh on Margins: Historically, volatility in lumber prices has been a major concern for the wood industry. Any unusual rise in the cost of lumber products sold by primary producers increases the cost of inventory and limits margins on fixed-priced lumber products. Yet, a decline in costs eats into profits as products sold are indexed to the current lumber market. Meanwhile, the timberland business is governed by federal rules and state forestry commissions, which are subject to frequent changes, thereby affecting businesses. Further, due to the very nature of their properties, timberland REITs are required to follow eco-friendly mandates in their trade. Furthermore, the companies have been experiencing supply chain challenges and higher freight and transport costs. For example, resin unavailability is posing quite a challenge. The industry participants use a significant quantity of various resins in the manufacturing processes. Resin product costs are influenced by changes in the prices or availability of raw materials used to produce resins, primarily petroleum products, and the demand and availability of resin products.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Building Products – Wood industry is an 11-stock group within the broader Construction sector. The Zacks Wood industry currently carries a Zacks Industry Rank #35, which places it in the top 14% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates impressive near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since April 2022, the industry’s earnings estimates for 2022 have been revised upward to $4.06 per share from $3.71.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Outperforms Sector & S&P 500The Zacks Building Products – Wood industry has outperformed the broader Zacks Construction sector and the Zacks S&P 500 composite over the past year.Over this period, the industry has lost 8.5% compared with the S&P 500 and the broader sector’s 9.8% and 18.8% decline, respectively.One-Year Price PerformanceIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing wood stocks, the industry trades at 12.62X versus the S&P 500’s 16.19X and the sector’s 9.93X.Over the last five years, the industry has traded as high as 40.25X, as low as 12.62X and at a median of 23.42X, as the chart below shows.Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500 5 Wood Stocks to Buy NowWe have selected five stocks from the Zacks universe of wood stocks that currently carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Weyerhaeuser: Based in Seattle, WA, this company is one of the world's largest private owners of timberlands. Its focus on operational excellence is expected to drive growth. Again, more home improvement and R&R markets activities are raising hopes. Focus on operational excellence and efforts to boost financial flexibility enabled it to generate solid cash flow and strengthen the balance sheet. Weyerhaeuser remains optimistic about its performance despite persistent supply-chain issues, the recent uptick in mortgage rates and ongoing affordability concerns in the housing market, given favorable demographics, and a decade of underbuilding and historically low inventory for new and existing homes.Weyerhaeuser, a Zacks Rank #1 stock, has dropped 1.9% over the past year. Yet, WY has seen an 18.5% upward estimate revision for 2022 earnings over the past 60 days. The positive estimate revisions depict analysts' optimism over the company’s prospects.Price and Consensus: WYBoise Cascade Company: Based in Boise, ID, this Zacks Rank #2 company makes wood products and distributes building materials in the United States as well as Canada. Boise Cascade’s Building Materials Distribution and Wood Products segments are gaining strength from strong end-product demand (particularly for EWP) as well as higher commodity product prices. It has also been increasing commodity offerings that will instill growth in the existing markets, underserved markets and across its entire national footprint.Importantly, Boise Cascade — which has gained 12.6% in the past year — has seen a 22.3% upward estimate revision for 2022 earnings over the past 60 days.Price and Consensus: BCCLouisiana-Pacific Corporation: Headquartered in Nashville, TN, this company manufactures building products, primarily for use in new home construction, R&R as well as outdoor structure markets. Strong Siding Solutions (formerly known as SmartSide) revenues and an increase in OSB pricing will boost Louisiana-Pacific’s bottom line despite the ongoing headwinds from raw material prices and availability. Operational efficiency and cost-containment efforts are also encouraging.Louisiana-Pacific currently carries a Zacks Rank #2. LPX’s shares have lost 3.1% in the past year. Nonetheless, the consensus estimate for 2022 earnings has witnessed an upward revision of 14.2% in the past 60 days. Price and Consensus: LPXRayonier: Jacksonville, FL-based Rayonier is a leading pure-play timberland REIT. With a solid portfolio of timberlands in some of the most productive timber-growing regions of the Southern United States, Pacific Northwest and New Zealand, this company remains well-positioned to capitalize on higher demand trends, thereby improving export market conditions and leading to a favorable pricing environment. It also remains focused on adding high-quality timberlands to its portfolio through acquisitions.The consensus estimate for Zacks #2 Ranked Rayonier’s 2022 earnings has witnessed an upward revision of 4.8% in the past 30 days. The stock has gained 6.3% in the past year.Price and Consensus: RYNUFP Industries: Headquartered in Grand Rapids, MI, UFP Industries supplies wood, wood composite and other products in retail, industrial, and construction markets. An increase in home improvement activity resulting from stay-at-home orders has been benefiting UFP Industries’ Retail segment. Expansion of the product portfolio through acquisitions and product innovations is also noteworthy.This Zacks Rank #2 stock has dropped 7.2% in the past year. Nonetheless, UFP Industries’ 2022 earnings are expected to grow 16.1%. Price and Consensus: UFPI Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Weyerhaeuser Company (WY): Free Stock Analysis Report UFP Industries, Inc. (UFPI): Free Stock Analysis Report LouisianaPacific Corporation (LPX): Free Stock Analysis Report Rayonier Inc. (RYN): Free Stock Analysis Report Boise Cascade, L.L.C. (BCC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 17th, 2022

Mortgage Applications for New Home Purchases Decreased 5% in May YoY

Mortgage applications for new home purchases decreased 5% compared to a year ago and are down by 4% when compared to April 2022, according to the latest Builder Application Survey (BAS) data for May 2022 released by the Mortgage Bankers Association (MBA) this week. This change does not include any adjustment for typical seasonal patterns,… The post Mortgage Applications for New Home Purchases Decreased 5% in May YoY appeared first on RISMedia. Mortgage applications for new home purchases decreased 5% compared to a year ago and are down by 4% when compared to April 2022, according to the latest Builder Application Survey (BAS) data for May 2022 released by the Mortgage Bankers Association (MBA) this week. This change does not include any adjustment for typical seasonal patterns, MBA stated. Key findings: MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 727,000 units in May 2022, based on data from the BAS. The seasonally adjusted estimate for May is an increase of 3.7% from the April pace of 701,000 units. On an unadjusted basis, MBA estimates that there were 61,000 new home sales in May 2022, a decrease of 6.2% from 65,000 new home sales in April. By product type, conventional loans composed 75.8% of loan applications, FHA loans composed 13.6%, RHS/USDA loans composed 0.2% and VA loans composed 10.4%. The average loan size of new homes decreased from $436,576 in April to $430,855 in May. What this means: “Applications to purchase new homes in May fell by 4% from April, as mortgage rates hit 5.5% and further dampened demand. Activity was already constrained due to tight for-sale inventory, high sales prices and extended building completion timelines,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “After increasing for 15 consecutive months, the average loan size fell slightly from April’s survey high to $430,855, which is a potential indication that cooling demand may be starting to moderate price growth.” Added Kan, “MBA’s estimate of new home sales increased for the first time in five months, showing a 4% gain to a 727,000-unit sales pace.” The post Mortgage Applications for New Home Purchases Decreased 5% in May YoY appeared first on RISMedia......»»

Category: realestateSource: rismediaJun 17th, 2022