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A virtual who’s who in real estate venture capital investing sees consolidation in the mortgage industry as an opportunity for Pylon, a startup that offers a fully embeddable, end-to-end mortgage service for enterprises.
Boasting that its application programming interface (API) can help proptechs, banks and retail brands build mortgage lending into their products in just weeks, New York-based Pylon announced $8.5 million in seed funding Monday.
“Mortgages are rapidly becoming commoditized across rates, loan products, and operations as indicated by the nearly identical rates amongst the top 10 lenders,” co-founder and CEO Trent Hedge said, in a statement. “We are long overdue for the infrastructure layer that standardizes these commodities through software — allowing our customers to focus on building highly differentiated, revenue-generating mortgage offerings at a fraction of the time and cost.”
Hedge, who previously cofounded digital custom homebuilder Atmos, founded Pylon this year with Marco Monteiro, a cofounder of Sherlock AI who has worked as a software engineer for companies like Databricks and Instabase.
Pylon offers a “unified stack from software to compliance and capital markets” including flexible API and integrations to pre-fill loan applications, instantly verify income and assets, pull credit and deliver “quick and accurate” decisions to borrowers.
Pylon’s seed funding round was led by Conversion Capital, which has a track record as an early backer of startups in finance and real estate that have gone on to make names for themselves, including Blend, Figure and Orchard.
The mortgage industry “is entering a new era of restructuring, following one of the greatest housing booms we have seen in a generation,” Conversion Capital’s Managing Partner Christian Lawless said in a blog post. Lawless thinks mortgage industry consolidation and wide-scale adoption of new technologies and processes will benefit borrowers.
“We believe this inflection point in technology and consumer behavior will usher in dramatically improved alternatives to legacy products and processes, which is why we’re excited to share our seed investment in Pylon,” wrote Lawless, who is joining Pylon’s board of directors.
Also participating in Pylon’s seed rounding are Fifth Wall, Peter Thiel, QED Investors, Montage Ventures and Village Global, along with existing angel investors from Ramp, Blend, Zillow, SoFi and Figure.
Launched in 2016, Los Angeles-based Fifth Wall is a leading investor in the proptech and mortgage technology business, having provided backing to companies including Blend, Doma, Flyhomes, Haven, Knock, Notarize, Opendoor, Pacaso, Polly and Sundae.
“We built Doorvest to help unlock home ownership for everyday Americans and to break down the barriers to people investing in real estate,” Doorvest co-founder and CEO Andrew Luong said in announcing the company’s partnership with Pylon. “Our mission is to simplify real estate investing so that long-term wealth is easy to access, build and grow. We are thrilled to partner with Pylon to make this even easier. The Pylon team has decades of experience in the mortgage industry combined with a tightly integrated software platform that will greatly serve our customers.”
Before settling on Pylon as its “doing business name,” Embed Inc. briefly used Braid Lending as its trade name. The company is registered or licensed as a mortgage company, broker or lender in six states — Colorado, Florida, Georgia, Oklahoma, Oregon and Texas — according to the Nationwide Multistate Licensing System.