Cloud-banking software company Blend Labs posted a $39.6 million operational loss for the second quarter of 2021, its first as a publicly traded company.
The firm, led by Nima Ghamsari, saw both a rise in revenue and a widening of operational losses in the quarter. Revenue ticked up to $32.1 million, up 46% over the $22 million the company posted in the prior year. Similarly, operational losses nearly doubled from roughly $20.8 million a year ago. The company has repeatedly said that it is focused on long-term value potentiation over short-term profitability.
“In the second quarter we continued to expand our customer base and grow within existing customers, closed a large acquisition that will accelerate the advancement of our platform, and executed a successful IPO with strong investor interest and support,” Ghamsari said in a statement.
Blend’s white-label technology is what powers mortgage applications on the websites of traditional banks such as Wells Fargo and U.S. Bank, as well as large credit unions and even some tech companies. It checks income, it verifies identities and has become a key consumer-facing processing tool for some of the largest mortgage lenders in the country.
Over the last two years, Blend has acquired its own mortgage insurance firm and title insurance firm. The latter deal, a $422 million investment in Title 365, closed in the second quarter. The company said it’s integrating Title365 into its system.
The startup claims it helped 291 clients process roughly $1.4 trillion in loan applications last year, and has compared its ultimate goal of processing like a mortgage as intuitive as someone selecting a movie curated for them by Netflix.
“I think every lender out there recognizes that to be competitive, successful in the market, they need to be able to have seamless digital experiences for consumers,” Blend President Tim Mayopoulos told HousingWire in late July. “That’s what people are looking for in every aspect of their life, whether it’s buying something on Amazon or ordering a movie on Netflix. People want to be able to interact with their bank or their credit union or their lender in exactly the same way.”
In its second quarter statement, Blend said total banking transaction volume climbed to over 520,000, an increase of 51% year over year. It also said it now has deals with 32 of the top 100 U.S. financial services firms by assets under management, and 28 of the top 100 nonbank mortgage lenders in the country. New clients include lender and servicer Mr. Cooper, retail lender KeyBank, credit card company Bilt Technologies and credit union BECU.
The company went public in July, selling 20 million shares of Class A stock at $18 apiece, raising $360 million.
Blend is projecting between $226 million and $232 million in revenue for 2021. Pro forma revenue, which includes the Title365 transaction, is expected to be in the range of $365 million and $371 million, the company said.
At the close of trading on Thursday, Blend’s stock was trading at $19.78 a share.