May 4, 2021

Serial entrepreneur Karl Jacob has tried to tackle a lot of industries in his career, from social networking to cybersecurity. So when a friend asked the repeat founder and former strategic advisor to Facebook if he could help him with his mortgage company, he said “sure.” He didn’t know what he was walking into. After spending time at the company’s call center, he realized how broken the system was. Jacob witnessed representatives repeatedly ask customers to fork over financial information that the reps could easily access on their own, only to then suggest loans that would generate the most profit, even if they weren’t the best choice for the consumer. Jacob quickly realized what his next company would be. “What if we try to modernize, not just the technology stack, but the mortgage process?” Jacob remembers thinking. “How do we know more about this person we are about to lend money to, so we can guide them as much as possible?” The resulting company is LoanSnap. Launched in 2018, the home mortgage platform aims to issue loans that improve the underlying consumer’s financial future. The startup, which has seen strong demand, just raised a fresh round of funding, as originally reported in the Midas Touch newsletter . True Ventures led LoanSnap’s $30 million Series B round, with participation from venture firms including Baseline Ventures, The Virgin Group and Mantis VC, among others, and individuals including former NFL quarterback Joe Montana, LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus. This fresh influx, which raises the startup’s funding to a total $64 million, will go towards expanding its services in other areas. “There are tons of other financial products that we are taking a look at,” he adds. “Particularly those that tend to take advantage of consumers where they shouldn’t.” LoanSnap is not the only startup trying to tackle the mortgage industry. But Jacob says his company is different. LoanSnap isn’t just looking to move the process online or make it faster — although the software does look to close loans within 15 days — it hopes to leave the consumer in a better financial situation than where they started. Users provide LoanSnap with basic info, like the last four digits of their social security number, and its AI system scans their financial information and shows users where they are losing money, like student loan interest or credit card debt, then recommends a “smart” loan that packages all those payments together to give users a way to improve their financial health by paying their monthly mortgage payment. “Our approach is focused on showing [consumers] very specifically how much they are losing every month, and then using an AI machine that has one goal, to optimize that person's financial system,” Jacob says. The startup’s services are currently available in 21 states. LoanSnap originates the loans itself, as opposed to being a mediary or a marketplace for other underwriters. Jacob says that keeping the entire process within the company allows for a quicker approval timeline. The company currently issues loans for mortgages, refinances and home equity lines of credit. Jacob says that LoanSnap was able to save its users $35 million last year by transferring their payments to one smart loan, and $16 million so far in 2021. The company expects to be profitable by the end of this year. MORE FOR YOU