Key facts
- Vishal Garg regained control of Better Home & Finance Holding Co.'s board.
- The company plans to cut quarterly operating expenses from $65 million to $50 million.
- Better aims to increase quarterly revenue from $50 million to over $65 million.
- The sale of Better's UK bank, Birmingham Bank, is expected to release about $65 million in cash.
- Better plans to pursue a stock repurchase program as soon as practical.
- The company is seeking to restart discussions with five potential partners for its HELOC business.
Vishal Garg unveiled his "Better 2.0" strategy during a Tuesday shareholder call, detailing plans to reduce costs, grow its wholesale and home equity businesses, and initiate a stock repurchase program. This comes a day after Garg regained control of the company's board through a consent solicitation that ousted five directors, including interim CEO Daniel Lewis.
Garg stated that the company is searching for both an interim and a permanent CEO with expertise in credit, artificial intelligence, and fintech. He indicated he would remain a public face for the company but did not specify his new role, noting his ability to drive results without empathy.
Key priorities for Garg's first 90 days include improving operational efficiency, expanding the home equity line of credit (HELOC) business, and selling the company's UK bank, Birmingham Bank. Better's quarterly operating expenses are targeted to decrease from $65 million to $50 million, while quarterly revenue is aimed to increase from the $50 million range to over $65 million. The sale of Birmingham Bank is expected to yield approximately $65 million in cash, bringing the company's total cash reserves to over $140 million, which Garg believes will be sufficient for the next 12 months without needing additional capital.
Better also plans to significantly grow its HELOC business, with a deal already signed for Credit Karma and discussions to be restarted with other potential partners. The company will also expand its wholesale mortgage operations, shifting focus from its previous direct-to-consumer and partnership models. Garg believes improving mortgage-funnel conversion rates could nearly double revenue without increasing costs. Artificial intelligence is being leveraged to reduce production costs and streamline processing.
Garg acknowledged that the recent leadership dispute impacted business relationships, causing some partnerships to stall, but expressed confidence in a full pipeline. The company has approximately 45 days to submit a plan to Nasdaq to address a board-related requirement and 180 days to resolve the issue, with plans to add more directors. Better is also considering a marketplace-like model for its platform, allowing multiple retail and wholesale brands to operate.