Mike Cagney’s financial technology firm Figure Technologies has taken another step to go public with its lending division, LendCo, hiring investment banks to coordinate the initial public offering (IPO), per a Bloomberg report.
People familiar with the transaction told Bloomberg that Figure is working with Goldman Sachs Group Inc., JP Morgan Chase & Co. and Jefferies Financial Group Inc. for the IPO. Figure and the banks declined to comment.
The company’s lending arm, valued between $2 billion and $3 billion, is expected to go public in the first half of 2024. However, the report states there’s no final decision on the timing and valuation. Figure had a $3.2 billion valuation in a venture-backed funding round in 2021.
Meanwhile, Figure seeks to raise $50 million for its digital asset arm, according to Bloomberg. The division, which won’t be part of the IPO, will be led by Cagney, the former head of SoFi. A new CEO would be considered for LendCo.
Figure originated $900 million in loans and generated $2.7 million in adjusted profits in the second quarter of 2023, according to Cagney’s letter to investors and partners in July. The profitable lending business has more than a 50% contribution margin, he said in a meeting.
Founded in 2018 by Cagney, Figure tried to go public before.
The company planned an initial public offering via a merger with special purpose acquisition company (SPAC) Figure Acquisition Corp. in 2022. However, it was scrapped with the blank check company getting delisted from the New York Stock Exchange.
Figure also announced its intention to merge with Homebridge Financial Services in 2022, which fell apart due to regulatory delays. CMG acquired Homebridge’s retail assets in March.
In July, Figure laid off 20% of its staff, about half of them engineers, in its first round of staff reductions.
Figure uses the proprietary platform Provenance Blockchain for loan origination, equity management, private fund services, banking and payments.
In June, it rolled out a wholesale lending platform that gives loan originators access to the company’s home equity line of credit offering.
CMG Financial, CrossCountry Mortgage, Fairway Independent Mortgage and The Loan Store are Figure’s private-label partners.
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