After striking two M&A deals late last year, digital multichannel lender Lower plans to acquire at least one other business in 2024. If it finds “a good company,” the lender is willing to pay a premium to the owners, according to Dan Snyder, the fintech’s founder and investor.
“I’d like to do another one [deal], but if we can find a good company — it’s hard to find — and we will pay the owner a premium,” Snyder said in an interview last week during The Gathering, HousingWire‘s real estate and mortgages conference held in Scottsdale, Arizona.
In a low-volume mortgage origination market, some sellers “don’t have the balance sheet or their owners are not interested in legacy and continuity,” which is a different model than Lower’s, Snyder said.
The company is looking for geographic expansion and companies that are “technically sound,” he added.
In November 2023, Lower announced the acquisition of Colorado-based Universal Lending Home Loans, which became a separate division. Universal president and industry veteran TJ Kennedy leads its retail and wholesale channels. Founded in Denver in 1981, Universal added 60 loan officers to Lower.
That deal was followed by the acquisition of Texas-based Thrive Mortgage in December. As is usually the case with Lower’s deals, Thrive maintained its brand. Thrive CEO Selene Kellam, and Randell Gillespie, its national sales director, joined the executive team at Lower.
Financials of the Universal and Thrive deals were not disclosed.
To support its business strategy, Lower announced in June 2021 that it had raised $100 million in a Series A funding round led by venture capital firm Accel. It also expects to raise more capital, “probably a Series B, ideally this year,” according to Snyder.
He added that becoming a publicly traded company isn’t out of the question, although it “really depends on the capital” needed in the future.
“Lower is still majority owned by myself and my co-founders,” said Snyder, who started his career in corporate banking at Wells Fargo and American Bank. “But we have raised money from Silicon Valley. They have seen the bottom [of the mortgage origination market] and can now start seeing the growth.”
Another minority stakeholder at Lower is Veritex Holdings, the parent company of Veritex Community Bank. In 2021, Veritex acquired a 49% stake in Thrive for $53.9 million, valuing the lender at roughly $110 million. Veritex kept a stake in Lower following the acquisitions of Universal and Thrive.
Acquisitions are only one part of Lower’s battle plan, as the lender is also looking to attract talent. In November, the company announced the addition of Amir Syed, co-founder of Growth Only Coaching, as its chief growth officer.
A multichannel lender, Lower operates an online consumer-direct channel that expects to launch a full-service refinance product by the end of the year. It also has an offline retail channel that is “picking up steam” through M&A opportunities, such as Thrive and Universal, and it maintains a local presence, Snyder said.
Meanwhile, Snyder said that Lower’s third-party origination platform that services brokers and other fintechs has been competitive with niche products such as down payment assistance programs.
“We get our customers from multiple places where they want to transact and then fulfill as efficiently as possible with technology,” Snyder said.
Lower claims that the Thrive acquisition made it the country’s 25th largest mortgage lender. According to the Nationwide Multistate Licensing System (NMLS), it had 620 sponsored loan officers and 108 active branches as of Tuesday.
