Modernizing Mortgages

By Chris Moore

Today we’re proud to announce that Redpoint has invested in Clara, an ambitious and much needed company that we think will transform the $10 trillion consumer home lending industry.

Let’s face it, getting a mortgage is painful. Way more painful than it should be. As a prospective borrower, you’re already stressed about the most important financial decision of your life when you are forced to deal with the most tedious, opaque process for procuring the hardest-to-compare, better-read-the-fine-print product you’ll ever buy. I particularly hate having to assemble the various financial health factoids for the pre-approval letter. And then doing it again during the formal loan application because…because why again? Ugh…I’ll take the root canal instead, please.

This sentiment is pretty much universal. Which is why we invested in Clara. Clara is transforming this medieval gauntlet of a process into a more manageable flow of technology-enabled steps. They’ve combined technology with attentive service from a customer service specialist who appreciates what a momentous time in your life this actually is. Unlike many of the recent VC-backed startups in the financial sector, Clara is not seeking to innovate on alternative sources of capital, but rather to simplify and streamline the loan origination process, leveraging technology with the goal of dramatically reducing cost, while improving the experience of families and individuals as they take this critical financial step in their lives. In doing so, Clara has its sights on the $1.6T of mortgages originated annually in the U.S.

But the real reason we invested in Clara is the team: founders Jeff Foster and Lukasz Strozek are world class operators and have assembled an incredible group of talented folks around them to tackle this problem. As I’ve written about previously, startups are insanely hard, and require exceptional founders with unique insights that are not broadly apparent to the rest of the market. Drawing from his time in private equity and subsequently at the US Treasury Department in the aftermath of the 2008 financial crisis, Jeff possesses an unparalleled understanding of the entire mortgage supply chain and how it could and should be re-imagined — from capital markets to meeting regulatory requirements to the borrower’s experience. And we were impressed by Lukasz’s approach to blending technical creativity with practicality in streamlining the loan process around the borrower’s financial identity.

There has never been a more important time to help Americans navigate our complicated and confusing housing finance system in order to buy a home. We are honored to work with the Clara team as they bring consumer lending into the 21st century.

Originally published at medium.com on August 17, 2016.