Blend Labs took the next step in becoming a publicly-traded company with the San Francisco-based mortgage technology outfit's registration statement going live.
Back in April, the company disclosed it had
The Securities and Exchange Commission filing does not include any amounts except a placeholder number for the size of the offering. However, Blend disclosed it is establishing a multiclass structure for its common stock that will give the Class B stock, which only company co-founder and Chair Nima Ghamsari will hold, 40 votes per share.
"The multi-class structure of our common stock is intended to ensure that, for the foreseeable future, Mr. Ghamsari continues to control or significantly influence our governance, which we believe will permit us to continue to prioritize our long-term goals rather than short-term results," the registration statement said.
The structure is intended to preserve Ghamsari’s control until he departs our company, the 35% ownership threshold is no longer met, or 50 years has passed since the closing of the offering.
That 35% ownership threshold is one of the determining factors for if the Class B shares convert to Class A; if issued, the Class C shares count towards that 35% equity total.
"The issuance of shares of Class C common stock to Mr. Ghamsari could prolong the duration of Mr. Ghamsari's control of our voting power and his ability to elect all of our directors and to determine the outcome of most matters submitted to a vote of our stockholders by delaying the final conversion of the Class B common stock," the statement added.
Among the risks cited in the statement are Blend's rapid revenue growth and concentration.
"In 2019 and 2020, our revenue was $50.7 million and $96 million, respectively, representing a 90% year-over-year growth rate," the filing said. "We expect our revenue growth rate to decline in future periods."
Furthermore, in 2020, its top five customers accounted for 34% of the company’s revenue. As of Dec. 31, 2020, it had 18 customers generating more than $1 million in annual revenue, making up 53% of its total last year.
Net losses at the company for 2020 totaled $74.6 million, an improvement over the $81.5 million for 2019. But in the first quarter, Blend lost $27.1 million, compared with a loss of $16 million in the fourth quarter and a loss of $22.9 million for the same period last year.
Blend plans to list on the New York Stock Exchange under the ticker symbol BLND.
Goldman Sachs, Allen & Company and Wells Fargo Securities are the lead book-running managers. KeyBanc Capital Markets, Truist Securities, and UBS Investment Bank are the book-running managers and Piper Sandler, William Blair, and Canaccord Genuity are co-managers for the proposed offering.
Blend joins the list of mortgage-related companies going public since the middle of last year.
Examples include HomeLight, which brought on Sean Aggarwal to its board as it
Not every company has followed through with their plans to go public. Genworth Financial's planned IPO of its mortgage insurance business, Enact Holdings,
