We didn’t think we’d see the day.
Digital mortgage lender Better.com’s proposal to combine with Aurora Acquisition Corp. via a SPAC (special purpose acquisition) has been approved by shareholders, the company confirmed today.
According to a Securities and Exchange Commission (SEC) filing, Better.com will combine with Aurora, or go public, “on or about August 22, 2023.”
“At least 65% of the outstanding ordinary shares of the company entitled to vote at this meeting have voted in favor of (the) proposal,” Arnaud Massenet, CEO of Aurora Acquisition Corp, said in a shareholder’s meeting on Friday, as reported by HousingWire.
Upon the closing of the transaction, the combined entity will see an infusion of at least $550 million in new capital from SoftBank, according to Aurora’s filing with the SEC in July. It could also receive another $200 million. If Novator, an investment firm that sponsors Aurora, exercises its $100 million option, then SoftBank is required to match. In late November 2021, we reported that Aurora Acquisition Corp. and SoftBank decided to amend the terms of their financing agreement to immediately provide Better with half of the $1.5 billion they had committed instead of waiting until the deal closed.
Better.com had originally began making plans to go public via a $6 billion SPAC in May 2021. (Later that year, the deal was valued at $7.7 billion). Things took a dramatic turn for the worse later that year, and the SPAC was delayed.
With so many challenges facing Better.com over the past two years – including layoffs, high-profile executive resignations, a housing market slowdown and negative publicity – industry observers were skeptical that the company’s going-public plans would actually materialize.
TechCrunch reported last week that the long-awaited vote for Better.com to go public was scheduled for today ahead of the extended deadline to complete the merger deal on September 30.
In late July, Aurora had said in an SEC filing that shareholders would be asked to vote on a proposal that if the SPAC merger did take place, with Aurora surviving the merger, Aurora would change its name to “Better Home & Finance Holding Company.”
Last year, Better.com declared that it intended to move forward with its planned public debut, despite the lackluster performance of blank-check combinations in previous quarters. Better.com itself had seen its fair share of turbulence since it announced its plans to merge with a SPAC, including multiple botched layoffs (more on those here and here) and changing market conditions that impacted parts of its business, including a surge in mortgage interest rates. In one layoffs meeting, CEO Vishal Garg famously was recorded saying the company had “probably pissed away $200 million.“
Last week, TechCrunch reported that the SEC had said it did not intend to recommend an enforcement action against Better.com. The pronouncement came after an investigation on the part of the SEC to determine if violations of federal securities laws had occurred. Last July, the SEC began looking into whether Better.com had violated federal securities laws, requesting documents from both the company and SPAC partner Aurora Acquisition Corp. about their business activities.
The embattled fintech startup laid off its real estate team on June 7, shifting from an in-house agent model to a partnership agent model. It also continues to bleed cash.
According to HousingWire, other Aurora filings from July show that Better.com had posted a net loss of $89.9 million in Q1 2023 and had slashed about 91% of its workforce over an approximately 18-month period. While Better.com seems to have narrowed its loss compared to a net loss of $327.7 million in the first quarter of 2022, it’s clearly still struggling.
Note: The story was updated post-publication to more accurately reflect the terms of the capital infusion.
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