EarnUp's new investors include KeyBank, LendingTree

Mortgage fintech EarnUp has completed a $31 million Series C funding round, which includes investments from KeyBank and lead generation company LendingTree.

"I think both of them realize that the mortgage industry is changing and needs to change," said Nadim Homsany, EarnUp's co-founder and CEO, in an interview with National Mortgage News. "You can call it modernization or increased use of technology, at the end of the day, borrowers want a better experience and both LendingTree and KeyBank see that."

EarnUp is a B2B2C company, Homsany said. It provides a private-label product that allows consumers the ability to schedule payments, not on a monthly basis, but when their paychecks actually arrive in their bank accounts. Customers can also pause the payments if needed, without having to go through canceling and reestablishing electronic fund transfers.

Lenders buy the product, which allows for continuity if the lender uses an interim servicer before the rights are sold along with the loan into the secondary market.

"So what we do is we create a private-labeled experience so that the borrower sees the lender's name through all of that," Homsany said. "And on the back end, we manage all the payments."

This allows EarnUp to gather data about the borrower to allow the lender to make a more informed decision regarding customer retention, an area that many mortgage lenders are not successful in, given that the success rate is less than 20%. Recapture is important because of the expense in acquiring a new customer.

"So think of it in some ways as an early mortgage trigger," Homsany explained. "You see that the borrower's income has gone up, we can help present a better savings opportunity for the borrower and an opportunity for the lender to not lose that customer."

In addition, because of how it interacts with the consumer, EarnUp can serve as an early warning signal for a potential missed payment, he added.

Bain Capital Ventures and SignalFire were the lead investors in this funding round, along with Blumberg Capital and Flourish Ventures.

All four of those companies participated in a $25 million Series B round announced in February 2021, with Bain as the lead investor. SignalFire was the lead investor in the December 2017 Series A round and Blumberg the lead in EarnUp's $3 million seed round in July 2016, according to Crunchbase.

D.A. Davidson served as both the strategic and financial advisor to EarnUp for this latest round.

"Embracing new technology and investing in innovative fintech companies like EarnUp helps us improve customer satisfaction — and allows us to provide our clients and communities with accessible payment solutions," Clark H. I. Khayat, executive vice president and chief strategy officer at KeyCorp, said in EarnUp’s press release.

LendingTree has made only one other investment in the past 20 years, participating in personal finance app Stash Financial's Series F round in April 2020, according to Crunchbase.

"Our financial and strategic investment in EarnUp is consistent with our goal to improve the customer experience," said J.D. Moriarty, president of marketplace and chief operating officer at LendingTree, in the press release. "It is also a natural fit with our comprehensive home and consumer loan marketplaces."