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Digital-lending startup Blend just nabbed $300 million from backers including Coatue and Tiger and is now valued at more than $3 billion. Here’s how it’s disrupting consumer banking.

Digital-lending startup Blend just nabbed $300 million from backers including Coatue and Tiger and is now valued at more than $3 billion. Here’s how it’s disrupting consumer banking.

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When it comes to consumer banking, the offerings and services involved run the gamut from the most basic of checking accounts to highly-personalized home loans and specialty vehicle auto loans. Accessing them all in one place via a seamless, online user experience, however, isn’t always easy.

That’s one of the new focuses of digital-lending startup Blend.

On Wednesday, San Francisco-based Blend announced a new fundraising round that brought the company’s valuation to $3.3 billion, a near doubling of its valuation since it last raised money five months ago in August.

See more: Machine-learning powered mortgage startup Blend overshot its expectations with a $130 million fundraise. Their CFO explains how they pulled it off.

Blend works with traditional lenders — such as Wells Fargo, US Bank, and Navy Federal Credit Union — to streamline their process of offering and managing mortgages and loans via digital channels.

The $300 million Series G round was led by Coatue Management and Tiger Global, whose past experience investing in software companies like Hinge Health and Rapyd appealed to Blend’s founder and CEO, Nima Ghamsari.

Previous investors include Canapi, who joined the company’s Series F round in August.

“We are a software company and so I wanted to get people who understood software. This was just the right round. It was a right time for somebody like that in the late enough stage,” Ghamsari told Insider.

“We’re excited because they’re both very long-term oriented investors,” he added.

A common system

Ghamsari said that a key part of Blend’s growth since the startup was founded in 2012 has been the increasing success of digital strategies at fintechs and challenger banks, placing pressure on traditional banks and lending companies to upgrade their online experience.

The COVID-19 pandemic, meanwhile, has only accelerated the “digital transformation banks and lenders are undergoing,” he said.

Read more: Blend, a startup that’s building a ‘one tap’ mortgage-application tool, is now jumping into the auto-loan market

Ghamsari said that the new capital will go primarily towards deepening existing customer relationships and further building out Blend’s suite of new consumer-banking tools used by banks like BMO Harris.

“These banks are built product line by product, even fintechs are built product line by product line. We’re going to build this common platform that can underlie all those products.”

Blend said it added more than 200 employees in 2020, a 60% increase, and facilitated $1.4 trillion in mortgages through its online tools.

Mortgage roots

Even as Blend looks to develop what it calls its new end-to-end service for digital banking, it’s also remained true to its lending roots by continuing to innovate the online mortgage process.

Blend’s lending technology, specifically, is currently used by Wells Fargo – one of Blend’s first partnerships in the mortgage space – and US Bank, among others.

“We’ve gone really, really deep in the home buying and home-financing process,” Ghamsari said, including developing a new offering that tries to improve on the “closing table” stage of taking out a mortgage — when the borrower must sign page after page of paperwork and meet with their lender, an escrow agent, a real estate agent, and lawyers.

Ghamsari also added that he believes Blends benefits from operating in the relatively confined industry of consumer banking and lending.

“One of the benefits of being in a vertical is that you have a small number of customers. We have a small number of customers that we can spend a lot of time on, and I want to spend more time on them, not less, as we become more successful,” Ghamsari said.

Read more: Smaller banks have been forced to evolve in the wake of the pandemic. Insiders explain how fintechs are playing a key role in the future plans of regional and community banks.

SEE ALSO: Julian Robertson’s Tiger Management is at the center of a quarter-trillion-dollar web linking billionaires, the Pharma Bro, and a ‘Big Short’ main character

SEE ALSO: Inside the rapid rise and fall of Coatue’s quant fund: How a 23-year-old Wharton wunderkind seized power, alienated employees, and blew a $350 million opportunity

SEE ALSO: Smaller banks have been forced to evolve in the wake of the pandemic. Insiders explain how fintechs are playing a key role in the future plans of regional and community banks.

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