New shares of Figure Technology Solutions (NASDAQ: FIGR) recently closed at $37, following its initial public offering at $25.00, which was above the proposed $20 to $22 range. Investors are clearly excited about Figure Technology’s business and frankly the more we learn about this company so are we.
Let us explain.
Figure has built a unique blockchain-based infrastructure to streamline financial services in consumer lending and capital markets. Founded in 2018 by SoFi co-founder Mike Cagney, Figure specializes in building out faster and cheaper web 3.0 financial services. For example:
Home Equity Line of Credit (HELOC): Figure is America’s #1 non-bank HELOC lender, offering products for home renovations, debt consolidation, and other personal needs.
Blockchain Platform: Provides solutions for lending, digital asset exchanges, crypto-backed loans, and plans to expand into auto loans and small business financing.
Partner Network: Enables efficient loan origination and capital markets through technology that integrates with partners, generating assets like loans for securitization.
The infrastructure.
Figure Markets operates on Provenance Blockchain, which is designed for fast, transparent, on-chain settlement of loans, trades, and real-world assets. YLDS is an alternative to traditional stablecoins, providing a 3.8% annual yield to holders. YLDS issues recurring interest payments and supports sending, saving, and trading activities. Figure Markets introduces products such as YLDS, described as the first SEC-registered yielding stablecoin, along with tokenized real estate and credit pools, with the aim of offering on-chain returns. Unlike most exchanges that retain control over client coins, Figure Markets uses MPC wallets to allow decentralized custody, giving users self-custody of Provenance native assets.
Disrupting existing markets by pioneering new services.
In old-style financial services, third-party intermediaries are often used to establish trust during transactions. Blockchain technology has been introduced as a way to reduce or potentially remove these intermediaries, allowing direct transactions between buyers and sellers. Currently, almost 170 companies utilize Figure’s blockchain technology for loan origination. Figure began with home equity lines of credit (HELOCs), as this segment was suitable for securitization, and approximately $17 billion in loans have originated from 200k end users to date. Consumers may now participate in yield bearing loan pools against mortgages which were previously reserved for institutions. According to company documents Figure HELOC loan yields are in the neighborhood of 9% compared to the recently lowered Federal Fund rate of 4%.
Customers seem to like it.
In 2024, the company achieved profitability, driven by a 75% year-over-year increase in customer usage volumes that resulted in a 58% growth in revenue to $341 million. Blockchain-enabled financial disintermediation services are positioned to supplant traditional providers reliant on legacy systems. Figure began by targeting the intricate and time-consuming loan issuance process by offering 100% automated end-to-end solutions, empowered by the company’s blockchain technology to enhance operational efficiency and customer experience.
Figure answers the question of “What’s new in FinTech?” We can tell, from an industry participation point of view, this story is going to be a fun ride. We are paying attention.
