Multiply Mortgage Raises $23.5M Series A - Kleiner Perkins

Rising Mortgage Rates and a New Approach to Homeownership

Mortgage rates, which reached historic lows during the initial phase of the pandemic, began an upward trend in 2022 and have remained elevated.

Currently, 30-year mortgage rates are exceeding 6.5% – a significant increase from the 2.49% seen in 2020 – making homeownership financially challenging for a substantial number of individuals.

Multiply Mortgage: A Novel Solution

A Denver-based startup, Multiply Mortgage, founded in 2022, is working to address this issue. Initially, the company focused on enabling tech employees to leverage the value of their equity compensation before their companies went public.

However, the founders, Michael White and Gautam Gupta – previously with Square, Opendoor, DoorDash, and Uber – noticed a prevailing trend: employees were primarily utilizing these liquidity offerings for home purchases and associated costs.

“The accessibility of homeownership has diminished for many Americans, and we anticipate that interest rates will likely not return to the levels experienced in 2020,” White explained to TechCrunch.

Expanding Services to Benefit Employees

In July 2024, Multiply Mortgage adjusted its strategy to introduce a mortgage benefit program. This program is designed to assist employees of partner companies, such as Anduril and Ramp, throughout the home-buying process.

Today, Multiply provides personalized consultations with mortgage advisors, educational sessions covering home purchasing and financing, and access to mortgage interest rate discounts of up to 0.75%. The company collaborates with a network of 15 to 20 lenders to secure these reduced rates.

According to CEO White, offering this program presents a compelling value proposition for companies, as it involves minimal cost and administrative burden.

“We are essentially establishing a new category – mortgage as a financial wellness benefit,” he stated to TechCrunch. While traditional lenders represent the primary competition, Multiply aims to distinguish itself through a focus on financial well-being via employer partnerships, alongside its discounted rates.

Securing Funding for Growth

This strategic shift garnered the attention of Kleiner Perkins, a prominent venture capital firm. They recently led Multiply Mortgage’s $23.5 million Series A funding round, as exclusively reported to TechCrunch.

BoxGroup, A*, Mischief, and Workshop also participated in this financing, bringing the company’s total funding since its 2022 launch to $27 million. The company has not disclosed the valuation associated with this new funding round.

Mamoon Hamid, a partner at Kleiner Perkins, emphasized that “attracting and retaining top talent is a priority for all successful companies, and competitive benefits and compensation packages are essential.” He believes Multiply’s direct collaboration with employers and automation of traditionally complex processes set it apart.

Founding and Future Plans

It is noteworthy that co-founder Gupta is also a general partner at A*, the investor that spearheaded Multiply’s $3.5 million seed round in early 2022. The concept behind Multiply began to take shape in late 2021, leading to the company’s official founding in early 2022.

Currently, Multiply operates as a mortgage broker, holding licenses to originate mortgages in 19 states. It also maintains broker partnerships in an additional 26 states and the District of Columbia.

Within the coming months, the startup intends to transition into direct lending operations.

Facilitating Home Financing for Individuals

Following its strategic shift, the company has successfully assisted close to 100 individuals in securing home financing, according to White.

Access to Multiply’s web application is granted to employees utilizing their corporate email credentials. Upon verification of employment status, users are able to schedule consultations with advisors and subsequently utilize the online application, transaction monitoring dashboard, and educational resources.

Multiply actively sources lending options from its network, identifying the most competitive rates and then applying additional discounts. White explained that the company’s ability to provide these discounts stems from its automation of the mortgage origination process, contrasting with the traditionally labor-intensive methods.

“Our focus on technology involves developing workflow automation and AI-powered tools to streamline back-office operations and enhance the efficiency of personnel,” he stated. “This results in a reduced cost structure, allowing us to offer lower mortgage interest rates to our clients.”

While other companies, like LendingTree, also aggregate potential lenders, White emphasizes a key distinction. LendingTree functions primarily as a self-service marketplace for lender discovery and comparison. In contrast, Multiply operates on a concierge model, coupled with reduced interest rates.

Currently, Multiply employs a team of 25 individuals.

The newly acquired capital will be allocated towards further development of the mortgage origination platform, as well as expansion of the mortgage advisor team and strategic company partnerships. The company currently collaborates with 23 partner organizations, encompassing both publicly and privately held companies across diverse sectors.

Multiply generates revenue through commission earned on completed mortgage originations.