Lending Platform Blend Labs Raises $360 Million in Top-Range IPO

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(Bloomberg) — Blend Labs Inc., a lending platform for financial companies, raised $360 million in an initial public offering price at the top of a marketed range.

San Francisco-based Blend sold 20 million Class A shares Thursday for $18 each, according to a statement. The company had marketed 20 million for $16 to $18.

Blend has a market value in the listing of almost $4 billion based on the outstanding shares listed in its filings. Accounting for employee stock options, the company diluted value is closer to $5 billion.

Blend co-founder and Chief Executive Officer Nima Ghamsari will retain control of the company through ownership of 100% of the company’s Class B shares, which carry 40 votes each compared with one for Class A shares, according to the filings. Backers such as Lightspeed, Formation8, Coatue Management and General Atlantic will have less than 15 of the voting power combined.

The nine-year-old lending startup has built platforms that 31 of the top 100 U.S. financial firms use for products such as mortgages, vehicle loans and credit cards at the end of 2020. In total, the firm helps companies process an average of more than $5 billion in transactions per day. Blend said in January that it had raised $300 million from investors, giving the company a valuation of $3.3 billion.

The coronavirus pandemic has accelerated the move toward digitization in the financial services sector, a sign that bodes well for Blend, the company said in the filing. Blend reported a 166% increase in transactions on its platform from March 2020 through the end of the year compared to 2019, a portion of which is attributable to financial companies’ desire to digitize some processes.

Blend had a net loss of $75 million on revenue of $96 million in 2020, compared with a loss of $81 million on revenue of $51 million the previous year, according to its filings.

The offering is being led by Goldman Sachs Group Inc., Allen & Co. and Wells Fargo & Co. Blend’s shares are expected to begin trading Friday on the New York Stock Exchange under the symbol BLND.

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