San Francisco-based startup Vesta, which provides a software-as-a-service platform for mortgage loan originators, announced on Thursday that it raised $30 million through a Series A funding round. The new capital will be invested in an “aggressive” hiring plan and technology expansion.
The round is led by the venture capital firm Andreessen Horowitz, with participation from new investor Zigg Capital and seed investors Conversion Capital and Bain Capital Ventures. Investors backing Vesta also include Index Ventures.
In total, Vesta has raised $35 million since November 2020, when Mike Yu and Devon Yan, early employees at the cloud-based platform for banking products Blend, founded the startup.
Vesta has a system of record for loan origination data and documentation; a workflow engine to orchestrate process among borrowers, loan officers, underwriters; and open APIs (application programming interface) for partners to build their own solutions. The platform supports approval, underwriting, closing, and funding of home loans.
The company targets the $2.6 trillion mortgage loan origination market, according to the Mortgage Bankers Association (MBA) forecast for 2022.
Mike Yu, Vesta’s founder and CEO, said that amidst the pandemic, first-time homeowners and refinancing demand went to all-time record highs, and the increased volume uncovered how “inflexible, antiquated, and painfully” the mortgage process can be.
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“Today, as the market contracts, this shift to digital-first loan origination will accelerate. Lenders are motivated more than ever to invest in technologies that open and speed up the process to better serve borrowers, improve margins, and unlock new services.”
According to Angela Strange, general partner at Andreessen Horowitz, all the players – banks, brokers, and title agents – agree that a new system is needed to orchestrate and standardize loan origination, but to date no one has successfully built it. “Vesta’s team understands the depth of the problem and is technically adept to solve it.”
