Shares of Figure Technology Solutions Inc. jumped 21% in today’s trading session, bringing the newly listed blockchain company’s market capitalization to $5.29 billion.
Figure went public late Wednesday in an offering that raised $787.5 million. Investors bought 31.5 million shares for $25 apiece, a significant premium over the $18 to $20 the company had originally sought. Several of Figure’s existing shareholders used the opportunity to sell some of their stock.
Figure launched in 2018 with a home equity line of credit, or HELOC, service. It allows consumers to take out loans using their homes as collateral. The service is powered by a custom blockchain, the Provenance Blockchain, that Figure uses to store information about loans in an immutable format.
The company positions its HELOC platform as a faster and more cost-efficient alternative to traditional lending services. The median amount of time it took Figure to issue loans as of June 30 was 10 days, which it says is more than four times faster than the industry median. The company is also promising significantly lower debt issuance fees.
Figure keeps its costs down by automating several aspects of the loan origination workflow. According to the company, its software can process loan applications in about five minutes without any manual input. Figure also automates tasks such as title verification, which is the process of checking the ownership of a home being used as collateral.
The company has branched out to other markets in recent years. In addition to originating loans directly, Figure enables other financial services providers to issue debt using its Provenance Blockchain. It charges fees for such transactions.
Figure disclosed in the paperwork for its initial public offering that more than 165 financial firms use Provenance Blockchain to issue loans. According to the company, that customer base includes half of the 20 largest mortgage issuers in the U.S.
Last year, Figure expanded into the cryptocurrency trading market by launching a digital asset exchange. The company followed up the move by issuing a stablecoin called YLDS. It’s an interest-bearing digital asset that is registered as a security with the U.S. Securities and Exchange Commission.
Figure generated $191 million in revenue across its services during the first half of the year, 22% more than 12 months earlier. Moreover, it became profitable along the way. The company generated net income of $29 million in the six months ended June 30 after losing $13 million a year earlier.
In a letter to investors attached to Figure’s IPO filing, founder Mike Cagney (pictured, left) indicated that the company plans to continue growing its product portfolio going forward. “We see the value proposition of blockchain extensible to every asset class,” Cagney wrote. “While we pioneered lending on blockchain, we are setting our sights on being the leader in bringing new asset classes such as equities on chain as well.”
Image: Nasdaq
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