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Morty, which operates in 34 states in the US, has its sights on expansion following its latest funding round.
On Wednesday (7 August), Morty announced that it has raised $8.5m in Series A funding, in a round led by Prudence Holdings.
There was also participation in the funding round from Thrive Capital, which led Morty’s seed round in 2017, and Lerer Hippeau.
Prudence Holdings has previously invested in real estate brokering start-up Compass. Morty’s team met the investment firm through the Techstars accelerator programme in New York.
The most recent investment brings the total raised by Morty to over $11m.
Founded in 2016 by Brian Faux, Nora Apsel, Sarah Thomas and Adam Rothblatt, Morty was set up to help first-time homebuyers simplify the process of applying for a mortgage.
The start-up’s platform allows the borrower to link their bank accounts to the site, which then surveys the data to determine the creditworthiness of a borrower. Morty also allows homebuyers to understand their buying power and which homes they can afford.
Users can then close on a mortgage from Morty’s website, which aggregates multiple mortgage lenders. There are more than 20 lenders on Morty’s platform for users to select from.
The platform
Apsel told Forbes: “We believe that people should have optionality when they’re shopping for the largest purchase of their life. If you go to a direct lender, then you only get them, as opposed to us, where you’re getting all of the lenders on our platform.”
While much of Morty’s platform is automated, Apsel told TechCrunch that there is also a human element to the process. “As well as having a digital platform that automatically verifies and underwrites people so that they know exactly how much they qualify for, we also have mortgage experts on staff available to help people through every step of the home buying process.”
Apsel said that the transparency and willingness to educate users is what attracts people to the platform. “It’s the lack of transparency and it’s the lack of communication that I think has frustrated this industry for so long,” she explained.
The start-up currently has licences to operate in 34 states in the US, a considerable expansion since the 10 states it operated in during its last funding round in 2017. The company aims to expand even further in the coming years.
When Morty was founded, the team expected the client base to consist primarily of millennials, however, the demographic actually using the service now is people aged 30 to 50.
In the profile with Forbes, Aspel admitted that the company is facing challenges with brand awareness. The start-up has reached 50pc of first-time homebuyers researching or looking to make a purchase, but many do not discover the service until it’s too late.
“We talked to a number of homebuyers who are like, ‘Oh, I wish I had known that you guys existed’, and so for us, our goal is really to make sure that we’re getting in front of them before that,” she said.
In a blogpost by early-stage venture capital fund Lerer Hippeau, the investors wrote: “Before Morty, the mortgage brokerage space was noticeably lacking the kind of seamless digital transacting experience customers have come to expect in nearly every other aspect of their lives.
“Built by mortgage industry veterans, Morty’s infrastructure is the missing piece. And that’s no small feat in a highly complex, regulated industry. With combined deep, nuanced industry knowledge and technical and data-centric capabilities, the founding team at Morty has the winning combination to help bring this market online.”
