Mortgage Giant Rocket Buys Personal Finance App Truebill For $1.3B
There’s a big new deal in the fintech sector. Truebill, a personal finance app that helps users manage their billings, subscriptions, and budgeting, et al., has sold to Rocket Companies (NYSE: RKT), a prominent American mortgage provider. Rocket will pay $1.3bn in cash for Truebill, a solid exit for a six-year-old fintech startup that raised around $80mn from VCs.
- The acquisition is strategic to expand Rocket’s turf in the personal finance sector. Already a trusted customer for mortgage loans, Rocket will adopt Truebill as an extra service for its customers to help keep their finances in check. The personal finance app will also be a channel to funnel customers towards Rocket’s services.
- Truebill has 2.5 million members, a user base that doubled in the last year, and $100mn in annual recurring revenue, according to a Rocket Companies’ statement. That’s a reasonable thing to get for a $1.3bn lump sum payment, or at least judging by the kind of acquisitions we see in the fintech sector.
- Rocket Companies is mainly a mortgage loan provider and offers extra services such as auto loans and insurance. It’s the largest mortgage provider in the US, with $320bn of loans made last year, its highest year on record. This year, it’s on track to surpass that record, with $275bn in loans made in the nine months ended September.
- With Truebill, Rocket is adding a personal finance app whose primary goal is to save customers money. The app helps manage subscriptions and billings to get the best rates and help customers keep savings or get cash advances if they ever need one. It’s a niche fintech app, one out of many available, that’s focused on specific services and does its job well.
Truebill is based in Maryland, a region not associated with big startup exits, making its sale even better. The startup has raised around $80mn from VCs, including Accel, Bessemer Venture Partners, and Day One Ventures. If all goes as planned, its sale to Rocket will be completed before this year ends.
Rocket Companies’ stock (NYSE: RKT) closed down 6.3% on Monday. It has a current market capitalization of $29bn.