In June, Columbus, Ohio-based Lower, a home finance Fintech, raised $100 million in a Series A Funding round, led by Accel. Ohio is not known to be a tech hotbed like New York City or the Bay Area and at the time. Lower said the funding was one of the largest bootstrapped Fintech companies to raise a Series A and the largest ever Series A round raised by an Ohio company. A notable accomplishment.
While primarily a mortgage platform, Lower offers complimentary services like a savings option with its home fund feature. Lower also operates under multiple brands Homeside Financial, AMSW Lending, Fairfax Mortgage, Key Mortgage Group, Lakeside Mortgage, Oz Lending, Q Home Loans, and True Lend as well as Lower Realty, LLC offering real estate services; Lower Insurance Services, LLC a homeowner’s insurance market.
Founded by Mike Baynes, Robert Tyson, Grayson Hanes, Chris Miller, and CEO Dan Snyder, Lower is profitable and says it is growing fast, targeting younger home-buyers and people looking to refinance a loan.
To date, Lower has facilitated over $16.5 billion in loans and the home market is hot due in part to low interest rates and a move away from urban centers to homes and communities where this is more space. Recently, Crowdfund insider received an update from Snyder about his company and how it is performing as the country starts to focus on a post-Covid environment.
Lower promotes lower interest rates for home mortgages. Are you directly originating loans? How are your rates better?
Dan Snyder: Yes. Because Lower owns all of the verticals, they’re able to offer lower rates. Lower doesn’t need to pay overhead costs like many traditional banks, so they’re able to focus on giving the consumer a lower rate.
You are based in Ohio, are you operating across the country? Where is most of your business? Are you mainly facilitating first mortgages?
Dan Snyder: Lower is licensed in 42 states with the Midwest and Mid-Atlantic [being our largest markets]. Yes, [mainly first mortgages].
In aggregate, how much in mortgages have you financed? What percentage are Refis?
Dan Snyder: Lower has funded billions in loans each year, doubling year over year, helping tens of thousands of families buy homes. 63% are refis. They’re just scratching the surface with how many customers we’re helping build wealth and save money.
Until recently, you bootstrapped Lower. How much of your own money (and co-founders) did you commit to Lower?
Dan Snyder: Having crossed $300 million in revenue and doubling revenue year over year, Lower’s co-founders have bootstrapped one of the largest Fintech companies to raise a Series A and the largest ever Series A round raised by an Ohio company.
What about insurance. How popular is this service?
Dan Snyder: All Lower customers receive an insurance quote and the popularity of the service is continuing to grow. Lower knows consumers appreciate the one-stop-shop aspect of our platform, which includes an avenue to protect their biggest asset through the insurance marketplace.
You also offer interest-bearing accounts. Are consumers utilizing this feature?
Dan Snyder: Since launching the HomeFund app in December, there have been more than 54,000 downloads.
The APY is 0.75%, which is much larger than other interest-bearing accounts. Lower wants to help consumers buy a home by saving for their down payment ahead of time. Lower also offers HomeCash, a dollar-for-dollar match up to $500 which can be used for fees.
The online mortgage sector is pretty competitive. How will you keep your edge over time?
Dan Snyder: First, we care a lot about our customers. We believe consumers want to have one partner through the home financing process, so we have a holistic platform approach to the market rather than just piecemeal, where we’re just doing mortgage or just doing insurance.
Second, we care a lot about product. The best product in this market is a combination of something that is as digital as possible but also has a human touch to it because this is such a big life transaction, probably the biggest in a lot of our customers’ lives. So we tried to design the app flow in a way where you can get as far along as you can in the application but if you want, at any point in time, to talk or chat with someone, we’re available.
Third, we care a lot about culture and creating the best tech company to work for in the Midwest. We’re already a top-rated employer in Ohio and nationwide and we want to continue that positive growth as part of our fundraise.
All of this translates into more than 16,000 reviews with a five-star average, so I think that’s just the output of caring a lot about our customers, products, and people.
What other features are you planning going forward? Will you add more bank-like services?
Dan Snyder: Lower’s co-founders are going to continue to run this business profitably, but the time is now to gain share. We are working with Accel, who has a track record of partnering with some of the best Fintech companies globally and also working with businesses that have a similar bootstrapped history like ours, such as Atlassian, Qualtrics, and Galileo. Lower has that same DNA.
Lower wants to become a global brand, raise money and gain market share by continuing to double down on product and build out capabilities. Lower is the best-kept secret in Fintech and plans to change that with smart branding, advertising, and sponsorships. We also want to invest in the local ecosystem of Columbus like Rocket has done in Detroit. Lower just partnered with the local MLS team, Columbus Crew, to name their new local stadium. This will also help build their team, which is really important for them.