Former SoFi CEO Mike Cagney’s new fintech startup, Figure Technologies, has announced that it recently closed an “uncommitted” line of credit worth $1 billion on a blockchain.
Having access to a line of credit means Figure can borrow up to the maximum loan amount as needed, pay the loan, and borrow money again.
Backing the startup are investment bank Jefferies and WSFS Bank’s parent company, WSFS Financial Corporation. Figure had previously secured backing from notable investors such as Morgan Creek during a Series B round that raised $65 million earlier this year.
The deal will let Jefferies periodically lend funding to Figure under a variable funding note secured by Figure’s home equity lines. WSFS Financial, meanwhile, will act as Jefferies’s trustee.
Powered by Provenance
Figure is using its own blockchain platform, Provenance, as the deal’s financing facility. The company is also using the Provenance blockchain to power its home equity loan service, which it claims can provide loan approval in as little as five minutes and secure funding within five days.
“It paves the way for the first securitization on chain, which will demonstrate the massive cost savings, risk reduction and liquidity benefits blockchain delivers,” Cagney said about Provenance, adding that the platform can support the entire loan financing cycle from end to end.
Jefferies’s Brian McGrath, who heads the investment bank’s securitized markets group, said that using Provenance has given them “full transparency into the underlying assets, real-time access to loan performance, and the process of accepting collateral has less friction than off chain.”
Kristin Moore, WSFS’s senior vice president and director of corporate trust, noted the losing the securitization deal will make it the first ever asset-backed security transaction whose loans originated on a blockchain platform.