Boise startup aims to be the ‘Amazon of mortgages’
by Sharon Fisher
We’ve likely all heard of “digital transformation,” or the concept of converting former paper-based processes into electronic ones to streamline them, saving time, money, and headcount. Blake Bianchi thinks it’s time to do that for mortgages as well, with the company he founded, Future Mortgage.
“Our goal was to create a platform that helps consumers get a loan for a less expensive option,” said Bianchi, who’s worked for banks and lenders for the past decade. “A more transparent process is what we’re building for consumers.”
‘Amazon of mortgages’
Bianchi’s goal is to reduce the overhead required to get a mortgage, and so reduce the costs. “There’s so much greed in the normal model that gets passed on to people buying their first home,” he said. “We choose to make less per loan because we have less overhead, and less of a corporate ladder of people making a lot of money. We make the process more autonomous, with fewer people, and pass the savings on to the consumer. The more I do it, the more I see inefficient processes and expensive costs.”
Blake Bianchi, founder of Future Mortgage. Image courtesy Blake Bianchi.
Reduced overhead is particularly noticeable because in some cases, competitors are getting mortgages from the same source as Future Mortgage, but charge $10,000 more, Bianchi said. “In the normal model, there are 10 to 15 managers who manage one office making $1 million a year,” he said. “We’re cutting out all the middle people and the corporate overhead.”
Bianchi’s goal is to be the “Amazon of mortgages,” he said.
Formation of the company
Bianchi’s mortgage team did about 1,000 mortgages each in 2020 and in 2021, to develop a basis for the application. “After helping that many, we wanted to step back and build the software,” he said. “We stopped doing loans and spent 2022 building the software,” which launched in January. He said he hopes to get 3,000 to 5,000 users this year.
In the first quarter, Future Mortgage has supported 50 users, all by word of mouth, Bianchi said. “So far in Q1, we’ve helped more customers than all of last year,” he said. “It’s been word of mouth from real estate agents and builders, referrals, and partnerships with websites like bankrates.com.”
That’s also meant the Boise-based company has been growing as well. Starting the year with five people, Bianchi was up to 22 in April – some of whom were commission-only – and added several more in May. He designs the platform, and a team of overseas developers in Pakistan and India develop it, he said.
Thus far, the app runs just on the Internet, but Bianchi plans to have a phone-based version by the end of the year, he said.
That growth in staff also means Future Mortgage is moving from its previous office space at 5th and Main Streets in downtown Boise. “We can only fit so many people in here,” he said. “Half our team doesn’t come in. You can come in and work, but you’re also free to be in the market doing your work.”
However, the new office isn’t far – just a couple of blocks away. “We love downtown,” Bianchi said. “We can walk around, go get lunch.”
Financing
Bianchi raised a seed round at the end of 2021, for an undisclosed amount, from Capital Eleven, which he said helped Future Mortgage develop the software in 2022. He hopes to raise a second seed round sometime this summer but hasn’t decided for how much yet, which the company will use to continue software development, marketing, and growth.
This is the first time Bianchi has tried to raise in the current economic climate, and he said he’s been finding it’s harder than in 2020 and 2021. In fact, he thought companies were being overfunded in 2020 and 2021, he said. “It’s crazy how they could raise that much,” he said. “How can they spend that much? They’re probably wasting their money.”
“Good companies learned a hard lesson last year,” Bianchi said. “Last year did a really good reset for venture capitalists (VCs) and startups. Companies that were able to survive and pivot and clean up the way they run their businesses are in a way better position this year. If you can show you’re fiscally responsible, there’s still VCs who need to spend money and invest in companies.”
In particular, companies need to fix their burn rate and track how they’re spending their money and make sure they’re using it wisely, Bianchi said. For his part, “we cut our burn rate down to zero,” making Future Mortgage cash-flow positive, he said – which wasn’t easy with what was going on in the residential real estate market. “Last year was the biggest increase in interest rates ever,” he said. “It was a real struggle.”
Bianchi hasn’t figured out his exit strategy yet. “Most mortgage companies that try to go public don’t do it well,” he said. “If we were going to exit, we would go for an acquisition.”
Meanwhile, Bianchi said he plans on five to 10 years of growth “Buying a house is someone’s largest purchase,” he said. “People don’t understand how much they could be saving compared with the traditional model.”
Sharon Fisher is a digital nomad who writes about entrepreneurship.