Key Takeaways:
– Splitero, a home equity investment company, lost its main investor, Redwood Trust
– Splitero had secured over $1 billion in committed capital, with $750 million supposed to come from Redwood
– Redwood launched its in-house home equity investment (HEI) origination platform called Aspire
– Redwood stopped buying HEI contracts prior to the launch of Aspire
– Splitero is looking for other investors and has closed over $250 million in investments since its launch
– Redwood declined an interview but stated that they have not shared plans for additional investments in HEI operators
– Splitero’s website states that they are experiencing overwhelming demand and have temporarily stopped taking new applications
– Splitero currently operates in selected parts of California, Colorado, Oregon, Utah, and Washington.
HousingWire:
Michael Gifford and David Zvaifler‘s home equity investment company, Splitero, lost its main investor, Redwood Trust, HousingWire has learned.
According to an internal presentation deck, the startup had secured more than $1 billion in committed capital. Out of that figure, $750 million was supposed to come from Redwood, representing 75% of the total capital. Atalaya committed $250 million while Kingsbridge put up $50 million. A source who received the deck from Splitero provided it to HousingWire on the condition of anonymity.
In September, Redwood launched its in-house home equity investment (HEI) origination platform called Aspire. The platform aims to “directly originate HEIs by leveraging the company’s nationwide correspondent network of loan officers and establishing direct-to-consumer origination channels,” the company told HousingWire.
During a phone interview with HousingWire on Oct. 16, Gifford said that Redwood stopped buying home equity investment (HEI) contracts prior to the launch of Aspire. Gifford also specified that Redwood was buying HEI contracts from different parties in the space and then pulled back from its commitments.
He added that Splitero was looking for other investors and hinted that the company would have some good news to share soon.
Gifford declined to discuss the company’s financial performance in 2023. According to its website, though, Splitero has closed 3,160 HEI contracts since its launch in 2021, totaling over $250 million in investments.
“Personally, I think it’s a great proof point for the space. Redwood trust is a well-respected institution,” Gifford said of Aspire’s launch. “I think it brings a lot of legitimacy to the product in the space. And so we are wishing them nothing but success on that.”
Redwood declined an interview for this story, but provided an emailed statement from John Arens, Redwood’s managing director and head of HEI:
“We have not shared any plans on additional investments in HEI operators. We remain focused on driving capital and financing to the sector, to provide long-term product solutions that benefit both homeowners and investors. This includes Aspire, Redwood’s new in-house HEI origination platform.”
Splitero’s website states that the company is currently experiencing “overwhelming demand.” As a result, the company temporarily stopped taking new HEI applications from homeowners.
“At this time, our primary focus is on funding homeowners who have already completed an application,” the company shared on its website.
Splitero currently operates in selected parts of California, Colorado, Oregon, Utah and Washington.
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Property Chomp’s Take:
Hey there! Today, let’s talk about a company called Splitero and some recent news they’ve been facing. It seems that Splitero, a home equity investment company founded by Michael Gifford and David Zvaifler, has lost its main investor, Redwood Trust. According to an internal presentation deck, Splitero had secured over $1 billion in committed capital, with $750 million expected to come from Redwood, representing 75% of the total capital. Atalaya and Kingsbridge also committed $250 million and $50 million, respectively.
Now, here’s where things get interesting. Redwood recently launched its own in-house home equity investment (HEI) origination platform called Aspire. This platform aims to directly originate HEIs by leveraging the company’s nationwide correspondent network of loan officers and establishing direct-to-consumer origination channels. However, it seems that Redwood stopped buying HEI contracts from Splitero prior to the launch of Aspire. Gifford mentioned during a phone interview that Redwood had been buying HEI contracts from various parties in the space but then pulled back from its commitments.
Despite this setback, Gifford remains optimistic about the future. He mentioned that Splitero is actively seeking other investors and hinted at some good news that the company will be sharing soon. While Gifford declined to discuss the company’s financial performance in 2023, Splitero’s website states that they have closed over 3,160 HEI contracts since their launch in 2021, totaling more than $250 million in investments. Gifford also expressed his support for Aspire’s launch, seeing it as a positive development that brings legitimacy to the home equity investment space.
Unfortunately, Redwood declined an interview for this story, but they did provide a statement from John Arens, Redwood’s managing director and head of HEI. Arens mentioned that they have not shared any plans for additional investments in HEI operators and are currently focused on driving capital and financing to the sector through their in-house origination platform, Aspire.
Splitero’s website currently states that they are experiencing overwhelming demand, leading them to temporarily stop accepting new HEI applications from homeowners. Their primary focus right now is on funding homeowners who have already completed an application. It’s worth noting that Splitero currently operates in selected parts of California, Colorado, Oregon, Utah, and Washington.
So, while Splitero may have faced a setback with the loss of their main investor, they are actively seeking new opportunities and remain optimistic about the future. It will be interesting to see how they navigate the evolving home equity investment landscape.
