Better.Com, an online mortgage lender backed by SoftBank (SFTBF), became an internet sensation overnight in late 2021 after its founder and CEO Vishal Garg abruptly fired 900 employees over a Zoom call. After nearly two years of bad press, market turmoils and financial losses, the company is going public—with the Garg still at the helm.
Better is expected to debut shares on Nasdaq “on or about August 22, 2023,” according to an SEC filing earlier this month. The company is pursuing a direct listing through a reverse merger with Aurora Acquisition Corp., a special-purpose acquisition company, or SPAC.
In December 2021, Garg announced the firings of 900 employees , or 9 percent of Better’s total staff, in a three-minute virtual company meeting. “If you’re on this call, you are part of the unlucky group that is being laid off,” a faintly sobbing Garg told meeting participants in a leaked video. The CEO cited poor outlook of mortgage demand and productivity as reasons for the massive cut. His handling of the layoffs spurred severe criticism of his leadership and led to the resignations of several senior company executives. To quell public outcry, Garg was placed on leave by Better’s board but quietly returned as CEO weeks later.
At the time, Better was already in the process of merging with Aurora for a potential public listing at a valuation of $6 billion that would bring an infusion of fresh capital. But voting of the merger was delayed multiple times amid a downturn of the SPAC market in 2022 and a SEC probe into both Better and Aurora later that year. The deal was finally approved by Better.com’s shareholders on Aug. 11.
According to earlier Aurora filings reported by HousingWire, Better lost $90 million in the first quarter this year and had slashed more than 90 percent of its workforce in the past 18 months. The direct listing will bring in at least $550 million in new funding from SoftBank, an existing investor, with the possibility of $200 million more, according to Aurora’s filing with the SEC in July.
