- Banking-tech provider nCino announced plans to buy mortgage startup SimpleNexus for $1.2 billion.
- The deal will see nCino expand into point-of-sale lending services, CEO Pierre Naude told Insider.
- nCino’s deal for SimpleNexus comes on the heel of mortgage-tech provider Blend’s July IPO.
In its first major move since going public in 2020, banking-tech provider nCino announced plans Tuesday afternoon to buy SimpleNexus, a digital-mortgage company, for $1.2 billion in a move that will see the behind-the-scenes company go direct to consumers.
nCino is a cloud-based operating system used by banks like Wells Fargo and TD Bank to digitally onboard customers, originate loans, and open deposit accounts. The company focuses on providing core-banking tech directly to financial institutions.
With SimpleNexus, nCino would be able to widen its scope of potential customers to independent mortgage bankers and broaden its reach into consumer-facing lending tech.
SimpleNexus partners with some 300 mortgage companies and 80 banks and
credit unions
. It provides digital referral, origination, and closing tools for home loans through an app interface used by loan officers and borrowers. Since launching in 2011, the company says it has partnered with lenders to handle some $3 trillion in home-loan volume.
“We believe that our approach has always been to allow you to come specifically to do a loan product or open an account. It’s very much bank-focused, pushing a product outwards. If you look at SimpleNexus, what they’ve done is look at it from the consumer coming into the bank,” nCino CEO Pierre Naude told Insider.
nCino is looking to round out its banking ecosystem
nCino plans to integrate SimpleNexus’ origination service, through which mortgage borrowers can apply for home loans via a mobile app and loan officers and real-estate agents can track the status of loans, into the company’s operating system, Naude said.
“This will put us right at the forefront of a point-of-sale solution that is consumer focused, or end-user focused, creating an ecosystem bigger than just a bank product,” Naude said.
Naude envisions using SimpleNexus’ tech to expand into other lending opportunities, like auto or unsecured loans, and “commingling the mortgage experience with additional loan origination or account-opening experiences.”
Of the $1.2 billion purchase price, roughly $960 million will be paid in stock and $240 million in cash, Naude said.
As part of the deal, Naude added, SimpleNexus’ roughly 300 employees will move to nCino, with no plans to relocate SimpleNexus from its home base of Lehi, Utah, which is outside of Salt Lake City.
Based in Wilmington, North Carolina, nCino debuted on Nasdaq in July 2020. While share prices have retreated about 20% from all-time highs last summer, the stock is up about 40% since May and the company is now worth roughly $6.8 billion.
Both nCino and SimpleNexus share a common investor, meanwhile: New York-based venture firm Insight Partners owns some 30% of nCino’s outstanding shares, according to Nasdaq, and led SimpleNexus’s $108 million Series B round this January.
nCino’s interest in SimpleNexus initially began about a year ago, Naude said, when the company began exploring a partnership with the mortgage-tech firm. Plans of a partnership soon turned into acquisition talks, at which point an nCino board member, Insight managing director Jeffrey Horing, withdrew from the discussions.
As part of the deal, Naude said, Insight has agreed to a lock-up of its shares in SimpleNexus.
nCino’s acquisition of SimpleNexus comes on the heels of mortgage tech provider Blend’s own IPO this July. Blend, which raised $360 million as part of the public offering at a valuation of more than $3.5 billion, offers digital-loan tools that banks like Wells Fargo and US Bank have dropped into their own lending workflows.
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