Seven CUs Contribute to Funding for LenderClose

A venture capital firm and seven credit unions have contributed to a $10 million second round of funding for LenderClose, the real estate and home equity lending technology platform announced Tuesday.

The Des Moines, Iowa-based company received the Series B funding round focused on the company’s growth. LenderClose’s news release said it has experienced a “rapid demand for its technology and innovative solutions,” onboarding nearly 300 credit unions and community banks since its Series A funding in March 2018.

“Our number one priority is growth. Growth in our people, our executive leadership, revenue and most importantly, maximizing value to our partners and users through innovative technology solutions,” Omar Jordan, founder and CEO, said.

Jordan said the company continues to improve its technology to provide higher efficiency for lenders and better experiences for borrowers.

“This has never been more important as the pandemic accelerated the demand for LenderClose, specifically our contactless lending solutions such as remote online notarization (RON),” he said.

LenderClose recently launched an automated loan processing solution it calls HEx (Home Equity Express). LenderClose’s news releases said HEx is built with a level of algorithm intelligence to ensure that the exceptions in the collateral data collected are earmarked for underwriting oversight and portfolio risk tolerance.

The additional investment will help expand the company’s research and development into process automation. The company’s goal is to “ultimately create a comprehensive lending solution, fully integrating every step of the lending process from pre-close to post-close,” according to the news release.

Samantha Paxson, a LenderClose board member and chief experience officer for CO-OP Financial Services, said LenderClose is filling a need for speed and digitization in the lending lifecycle for credit unions and community lenders, enabling them to process more loans faster.

“Their capital raised, and their ability, put that money to work across credit unions, makes it possible for our movement to rapidly expand loan volume without adding headcount, maximizing a credit union’s limited resources and moving at the pace members expect.”

LenderClose currently has more than 300 credit unions and community banks on its platform from coast to coast. The company has continued to advance its growth potential and projected it will double its client count by the end of 2022 and nearly double its staff headcount by this year’s fourth quarter.

“We have seen LenderClose grow faster than most fintechs in the industry have grown,” said Dave Tucker, a partner at Next Level Ventures, a venture capital firm based in Des Moines.

“The group has been able to accomplish so much with very little, since the Series A in March of 2018. This indicates that LenderClose has the right leadership in place and that the company is filling a major gap in the industry hence the aggressive client growth we’ve seen,” Tucker said.

Next Level Ventures’ website said it typically invests $500,000 to $5 million to achieve a minority position in growing companies.

“Our team is looking for companies that have the potential to become big opportunities. We provide capital and strong management expertise to help your company to grow quickly,” the website said.

In addition to the investment from Next Level Ventures, the funding came from these credit unions:

• Serve Credit Union, Des Moines, Iowa ($86.7 million in assets, 5,268 members).
• Financial Plus Credit Union, West Des Moines, Iowa ($196.6 million in assets, 11,921 members).
• Strata Federal Credit Union, Bakersfield, Calif. ($307.4 million in assets, 19,933 members).
• Ascentra Credit Union, Bettendorf, Iowa ($495.4 million in assets, 40,553 members).
• Tucson Federal Credit Union, Tucson, Ariz. ($569.2 million in assets, 67,671 members).
• Ardent Federal Credit Union, Philadelphia ($788.4 million in assets, 36,280 members).
• Collins Community Credit Union, Cedar Rapids, Iowa ($1.3 billion in assets, 89,186 members).