Congratulations, LendingHome!

I’m always on the lookout for the combination of the right entrepreneurs with the right idea at the right time – especially in the FinTech space. So when Matt Humphrey and James Herbert approached me to talk about their new company, I saw immediately that they were onto something big.

Earlier today, LendingHome announced itself to the world – having raised$100 million in investment financing and originated $100 million in loans in just 12 months of operation. They’re showing everyone what it means to have momentum coming out of the gate.

Foundation Capital is proud to have led the Series A for this fast-growing company and the extraordinary entrepreneurs behind it. This is their story.


James Herbert had a problem.

He had founded and ran the acquisition department at Colony American Homes, where in less than a year he helped the company buy its first 5,000 homes. He later left to build a successful private real estate fund with a portfolio of housing investments across multiple states.

Business was great, and everything was clicking into place – except for one all-important thing: traditional lenders didn’t seem eager or even able to meet him halfway.

Despite Herbert’s high-quality portfolio, the inadequate debt options available to him quickly proved frustrating. He began to research the bank, portfolio lending, and private lending spaces to get a sense of why the market seemed to be so inefficient.

Herbert simply couldn’t find the dynamic lender he needed, and didn’t understand why it didn’t exist. It seemed he’d have to create it himself. And just as he was getting started, he got a call from his old friend, Matt Humphrey.


Before Matt Humphrey co-founded LendingHome, he was a Foundation Capital entrepreneur with his company HomeRun – putting him among the many repeat founders from across the firm’s investment history.

Humphrey began college at Carnegie Mellon at the age of 13. He had built five startups before he created HomeRun, which quickly grew to become the largest online platform for deals on products and services from local businesses. In 2011, when it was acquired by Rearden Commerce for $100 million, Humphrey stayed on to lead Rearden’s new local offers division – a measure of his dedication.

After leaving Rearden, Humphrey called on Herbert to help him vet – and ultimately decline – an opportunity to become a limited partner in a real estate fund. But they would find an area – and an idea – that interested them both.


Over the course of a fateful dinner in 2013, Humphrey and Herbert applied their very different perspectives and arrived at the same conclusion: there was a massive opportunity to disrupt traditional banks with a marketplace platform that reimagined mortgage lending from the ground up, with technology at the core.

On October 1, 2013, the two friends became the two founders of LendingHome.

Still, Herbert and Humphrey knew that while technology had the clear potential to achieve unheard-of efficiency and cost savings, mortgages presented a particularly tough set of new challenges.

To effectively size up both the property and the individual, the new company would have to create new methods of data analysis. And funding the loans would require recruiting strategic investors to purchase these new loans.

But while the technological and financial hurdles would be significant, Herbert and Humphrey also knew they had a chance to do what banks could not – put people who didn’t have access to the traditional mortgage market into homes they could afford while providing a liquid market for real estate investors to pursue development projects.

They just needed investors who understood the magnitude of the opportunity.


Foundation Capital is no stranger to new lending models. In the case of consumer loan marketplaces, I’ve been studying – and sampling – the model since 2007. For years, universally disliked incumbents have offered outmoded products and services – all but waiting around for a new model to capture the giant market and displace the old system.

That left significant opportunities for new companies to use technology, data, and analytics to identify, source, and evaluate borrowers (demand) and connect them with deep sources of capital that was hungry for alternative assets (supply). By creating new systems and processes, a new company could better manage the market for borrowers and investors alike – and take significant share in the process.

The largest area we identified in our analysis was consumer lending. In 2010, we invested in Lending Club to go after that opportunity. But until Humphrey and Herbert approached me to talk about their new company in 2013, we still hadn’t found anything compelling in real estate, the second largest market opportunity (as discussed in our 2014 white paper “A Trillion Dollar Market By the People, For the People”).

As LendingHome was beginning operations, Foundation helped recruit key figures – two investors to purchase the newly originated loans, five advisors, and two crucial hires (CFO Andrew Swain and VP John Garner). Each has been playing an indispensable role making LendingHome theplace where mortgage borrowers and investors met – and where both benefitted from a more straightforward, expedient and transparent process.


LendingHome’s success with customers and investors became evident early.

Borrowers receive a custom rate in 3 minutes, finish their application in 20 minutes, and close in less than 10 days – which happens 100 percent online. And Investors benefit from LendingHome’s highly automated system – which produces loans in an efficient, consistent, and reliable manner.

After 12 months of operation, LendingHome has raised $100 million in equity funding, originated $100 million in loans, and received hundreds of millions of capital commitments from investors to buy loans (of the billions ultimately required). And the company continues to widen the technology gap that, going forward, will keep it on top.

The reason LendingHome came to be – and came to be so successful – stems directly from who James Herbert and Matt Humphrey are as entrepreneurs. It was a perfect match of their diverse experience and their single-minded determination to make this company a success.

From everyone at Foundation Capital, congrats to the entire team at LendingHome for building what we believe is the next big idea – and the next big brand – in FinTech.

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