Mike Cagney seems to have spun gold again, marking his return to the loan financing industry in a huge way. According to a recently published press release, Figure Technologies, a FinTech startup that helps issue home equity lines of credit (HELOCs) on its very own private blockchain, has been able to secure $1 billion in “uncommitted” asset-based financing.
The startup was established by Mike Cagney, the founder and former Chief Executive Officer of online lending service provider Social Finance Inc. (SoFi.) Cagney had been at the helm of affairs at SoFi since the company was established back in 2011. He however left in the wake of the backlash from former employees, who accused him and several other company managers of sexual harassment and promoting an anything-goes, “frat house-style” corporate working environment.
The ending company has however been able to diversify into a full-fledged financial services provider under the leadership of Anthony Noto, its new CEO, and former Chief Operations Officer at Twitter.
With a $4.5 billion valuation, the company has been able to expand its portfolio, and it was also reported to be working on offering cryptocurrency trading services on exchange platform Coinbase. Still, if this press release is anything to go by, it seems that Cagney has bounced back pretty well. Fresh from a Series B funding round led by RPM Ventures, Figure is now taking giant strides.
According to the press release, it secured its line of credit from investment banking firm Jefferies Group LLC and financial service provider WSFS Institutional Services. Amongst other things, Figure will be able to receive periodic advances from Jefferies, and it will be able to borrow as much as $1 billion to provide any required loan financing.
The financing facility is located on Provenance.io, a blockchain-based platform that Figure developed back in 2018. Pricvenance.io will now be used to develop, finance, and sell HELOCs to various financial institutions, including credit funds, asset managers, and even banks. WSFS Institutional Services is a division of the WSFS Bank, and according to the release, it will be acting a trustee for Jefferies. Figure claimed that it has been working with both institutions for the past six months to help provide an effective structure for Provenance’s financing facility.
Speaking on the deal, Brian McGrath, Head of the Securitized Markets Group at Jefferies, said, “We’ve already experienced the benefits of financing on Provenance.io. We’ve gained full transparency into the underlying assets, real-time access to loan performance and the process of accepting collateral has less friction than off chain.”
Cagney was also full of optimism, saying that the secured financing will now allow the blockchain platform to support end-to-end loan financing. He added, “It paves the way for the first securitization on chain, which will demonstrate the massive cost savings, risk reduction and liquidity benefits blockchain delivers.”