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Karl Jacob has tried to start businesses in a lot of different fields, from social networking to cybersecurity. So when a friend asked the repeat founder and former strategic advisor for Facebook if he could help him with his mortgage company, he said “sure.” He had no idea what he was getting himself into. He saw how broken the system was after working at the company’s call center.

Jacob saw salespeople ask customers for financial information that they could easily get themselves. The salespeople would then recommend loans that would make the most money, even if they weren’t the best choice for the customer. Jacob knew right away what he would do for his next business.

“What if we tried to update not only the technology stack but also the way mortgages are handled?” Jacob remembers what he thought. “How can we find out more about this person so that we can help them as much as possible?” LoanSnap is the company that came out of it. The home mortgage platform, which came out in 2018, aims to help people get loans that will improve their financial future. As first reported in the Midas Touch newsletter, the start-up, which has been getting a lot of interest, has just raised a new round of funding.

The $30 million Series B round for LoanSnap was led by True Ventures. Baseline Ventures, The Virgin Group, Mantis VC, and other venture firms, as well as individuals like former NFL quarterback Joe Montana, LinkedIn co-founder Reid Hoffman, and Zynga founder Mark Pincus, also took part. This new money brings the startup’s total funding to $64 million, which will be used to grow its services in other areas. “We are also looking at a lot of other financial products,” he says. “Especially those that take advantage of people when they shouldn’t.”

LoanSnap isn’t the only new company trying to break into the mortgage business. Jacob says, though, that his business is different. LoanSnap doesn’t just want to move the process online or make it faster—though the software does try to close loans within 15 days—it also wants to leave the consumer in a better financial situation than when they started. Users give LoanSnap basic information, like the last four digits of their social security number.

Its AI system then scans their financial information and shows them where they are losing money, like on student loan interest or credit card debt. It then recommends a “smart” loan that bundles all those payments together to help users improve their financial health by paying their monthly mortgage payments. Jacob says, “Our strategy is to show [consumers] exactly how much they are losing every month, and then we use an AI machine whose only goal is to optimize that person’s financial system.”

Services from the new company are currently offered in 21 states. LoanSnap makes the loans themselves instead of acting as a middleman or a market for other lenders. Jacob says that the approval process can go faster if the whole thing stays inside the company. The company gives out loans for mortgages, refinancing, and home equity lines of credit at the moment. Jacob says that by moving their payments to one smart loan, LoanSnap users saved $35 million last year and $16 million so far in 2021. By the end of this year, the company hopes to be making money.

The new company wants to take advantage of how busy the housing market is right now. The National Association of Realtors says that home sales in March 2021 were up another 12% from the same month last year. This comes after several months of steady growth, which makes the mortgage industry very busy. Even though there has been a recent growth spurt, the mortgage industry is still very split up. As of 2019, Quicken Loans has the biggest share of the market, but it’s only 5%. This leaves a lot of room for players like LoanSnap to take advantage of the situation.


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