Tech-savvy mortgage broker Sindeo is back in business, following an acquisition by Renren, a Chinese social media company and an investor in U.S.-based fintech firms including Social Finance and LendingHome.
Less than a month ago, San Francisco-based Sindeo was on the brink of going out of business. The only page on its website was a letter signed by company founder and CEO Nick Stamos that gave scant details about
Now, its website is active again for consumers to apply for loans online, without any sign of the break in operations, although its most recent
"Renren, one of Sindeo's investors, has acquired Sindeo and all of its assets. We are excited to work closely with the Renren team to execute on our original mission of offering homebuyers a straightforward path to home ownership and refinancing," Stamos confirmed in an email to National Mortgage News.
Sindeo had a good business model, "they just burned way too bright; that's why they ran out of money," said co-founder Christopher Hussain, who left the company over two years ago to become the founder and CEO of RealKey, a mortgage and real estate transaction and management platform.
Sindeo's expenses, including staffing and business development, were too high and that led to the problems in the first place. Instead of spending large amounts of money on business development, Sindeo should have worked on making its name, Hussain said.
"I did it by creating a brand and going through and showing people I knew how to get the right mortgage at the right rate. That is what they should have been focusing a lot more on, making that reputation within the real estate community and other businesses too," he said.
Stamos, along with Sindeo's legal counsel Jobe Danganan, are apparently the only two remaining executives at the company.
Renren participated in the $5 million Series A funding round for Sindeo, along with ZenBanx. James Liu, Renren's chief operating officer, joined Sindeo's board.
The initial investment was for 13.11% of Sindeo, Renren's Securities and Exchange Commission annual report filing, on May 15, said. Then in August 2016, Renren purchased a secured note of $200,000 from Sindeo.
Renren was also an investor in SoFi; at the end of 2016 it owned a 21.06% interest in the company.
But in April 2017 Renren sold 14.1% of its preferred shares in SoFi for proceeds of almost $92 million, the SEC filing said.
"Due to the risk of being deemed to be an investment company, we are no longer seeking to make significant additional long-term investments in minority interests in privately held companies, and we are seeking to dispose of most of the interests that we previously acquired," the filing said. That includes the remainder of its SoFi stake.
