Investing in Bundle
The following excerpt is from Allied’s original deal memo to investors. To review investment opportunities in full, please consider joining the syndicate at Allied.vc/join
Here at AlliedVP, we are continuously on the lookout for exceptional teams on a mission to disrupt large, antiquated industries. Furthermore, when we combine this exceptional team with a relentless obsession to delight customers, we believe the convergence of these fundamental principles makes for a momentous opportunity to improve the world.
Enter Bundle Marketplace
Bundle is an online marketplace where consumers can shop for their mortgage anonymously – it’s Incognito Mode for mortgages, at the intersection of data privacy, fintech and the world's largest asset class – empowering consumers and removing bias from the mortgage origination process.
Traditionally, when a consumer requires a mortgage, they go online to shop around. However, to receive a quote, they must enter their phone number and email address, after which their data is sold to banks and mortgage lenders who bombard the consumer with spam and cold calls.
Furthermore, getting the best rate possible often relies on the loan officer’s experience coupled with risk-assessment algorithms. Unfortunately, these automated processes are often biased against minority groups, with a recent UC Berkeley study finding that lenders tend to give higher interest rates to African American and Latino borrowers, resulting in an additional half a billion dollars in interest compared to non-minority groups with similar credit scores.
Therefore, instead of selling customer data, Bundle has flipped the traditional model on its head, charging mortgage brokers a monthly platform fee plus a commission per each successful connection with a prospective homebuyer, empowering consumers to chat anonymously and compare quotes with multiple lenders, all while removing bias and keeping their information safe.
Bundle’s growth has been extraordinary (to say the least), tripling its traction QoQ and surpassing more than $1 Billion in mortgage requests on the platform as of May 18, 2021.
Why we are thrilled to support Eric and the team at Bundle
Following his Master’s in Economics, Eric started his career as a Credit Risk Analyst at HSBC, where he produced and presented asset quality forecasts to the CEO on a $50B residential mortgage portfolio. Eric later transitioned to Vice President of Mortgage Credit Risk at Bank of America, where he managed the analytics team responsible for mitigating more than $100M in asset loss reductions.
In 2012, Eric moved to Citigroup as VP of Product Analytics, where he led a team focused on developing and marketing consumer deposit and credit products. Before starting Bundle in 2019, Eric was the Director of Financial and Performance Analysis at Movement Mortgage LLC – a Top 10 mortgage lender with 783 locations and 3.5k+ employees, focused on providing lending support to underserved communities across the US.
Eric’s considerable experience and industry expertise provide the optimal foundation for building a disruptive company within the mortgage industry. Furthermore, Eric has a proven ability to successfully lead teams, launch products, acquire customers, turn data into actionable and profitable insights, and manage multi-billion dollar credit facilities at some of the largest financial institutions in the world.
Concurrently, while attending the Queen City Fintech Accelerator in 2019, Eric met his (now) co-founder and Head of Growth, Marco Burgarello. At the time, Marco was working as the accelerator’s Program and Relationship Manager, responsible for landing strategic partnership agreements with Wells Fargo, Bank of America, AIG, Ally Bank, and numerous other Fortune 500 institutions. After meeting Eric, it became apparent to Marco just how big of an opportunity Bundle represented, and he chose to join the company full-time.
One of the most impressive factors when assessing our investment in Bundle is just how far they’ve managed to grow as a team of only two people. This mindset of resourcefulness and efficiency in the pursuit of success is precisely the type of scrappy, inventive and enterprising entrepreneurs we want to buy stock in.
As for the market opportunity…
The American housing market is the largest asset class in the world, valued at $36.2T, and we’ve been looking for an attractive opportunity in this space for a while.
Moreover, recent trends in data privacy aim to put power back into the hands of consumers, empowering them to control their personal information and not have their data sold to large corporations.
However, while these new data privacy trends are primarily focused on social media companies, we believe this is merely the tip of the iceberg. For instance, as privacy pressures build, an increasing number of industries will be required to manage consumer data in more responsible and transparent ways.
As it pertains to mortgage lending, this industry is notorious for its inherent bias and predatory methods, such as cold-calling consumers, charging higher interest rates to minority groups, and selling their data to multiple banks and lenders.
Therefore, when we met Eric and uncovered his mission to place the consumer back at the center of the homebuying journey, it became instantly obvious just how big this opportunity is, residing at the intersection of data privacy, fintech, and the world's largest asset class.
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