When Mike Cagney resigned as the CEO of SoFi, most people probably thought that was the end of him, primarily because of the reasons behind him stepping down. However, Mike Cagney does not give up easily, and only a few months later, he and his wife, along with three other people, saw an opportunity in the market and grabbed it. They came up with a new company, Figure Technologies. With it having been around for only a couple of years, there is still a lot that the public does not know. Get to learn more about it through these facts.
1. It only hires employees who fit in the company’s culture
Everyone has their way of doing things; hence we are advised that when in Rome, we must do as the Romans do. Richard Branson said that if you can hire brilliant people, then they will make the workplace feel more like a playground. Maybe Mike Cagney agrees with this pearl of wisdom because he allows employees to assess how well the recruits will fit within the company. His concern is that the new hires will affect the culture of Figure Technologies.
2. Its executive team is mainly comprised of females
Unlike in SoFi, where all they focused on was results, Mike said that at Figure Technologies, things were different. First of all, they are putting more women in leadership positions starting with his wife, June Ou, who serves as the chief technology officer. It is not because she is married to the founder of the company, she is qualified since even before she held the same position at SoFi. His renewed attitude towards women has also led to the chief risk officer as well the general counsel being female employees.
3. Investors are hoping to make $150 million in profits before deductions in 2020
The only thing that would make an investor stay loyal to a company is if the dividends are worth it and, of course, that usually is in the hands of the directors who are the stewards of resources. With the CEO of Figure Technologies having a not-so-clean past and being blamed for the failure of SoFi missing its target for the fourth quarter, the investors are already wary. Therefore they expect that Mike Cagney will in 2020 deliver impressive financial results in the form of $150 million in profits before taxes, depreciation, amortization, and interest.
4. It is planning on increasing services offered
SoFi’s main reason for missed financial targets is due to the delinquent loans that had been extended during Mike’s watch. However, at Figure Technologies, Mike is doing things differently. As per the Wall Street Journal, the CEO was planning to launch a blockchain that would host loan-related documents. Additionally, it is putting the interest of its investors first since Mike revealed the firm would provide them with their own virtual currency.
5. The CEO has a past of sexual misconduct with his employees
In movies, we always see lawyers advising clients to deny whatever allegations are thrown at them since there is no evidence implicating them. That is what Figure Technologies CEO, who at the time, was the CEO of SoFi did when faced with sexual abuse claims. Employees said that he allowed staff to have inappropriate sexual behavior in the office. He also was accused of being romantically involved with a subordinate, but he denied it. However, later, after having already stepped down from his position, he confirmed that the claims were valid and were the primary reason for him resigning. Fortunately for him, the wife stood by him and helped him establish Figure Technologies.
6. Why the company got investors despite the CEO’s past
Everyone deserves a second chance regardless of how grave the mistakes were; that is what investors were willing to give Mike Cagney and his new startup. David Chao of DCM said that they invested in Figure Technologies because he saw a positive change in Mike. He added that in America, people are given second chances since Americans love a comeback story, unlike in Asia or Europe. Anthony Pompliano of Morgan Creek Digital disclosed that the past was gone, and it could not be changed, but they had confidence in the team that had been assembled at Figure Technologies.
7. The purpose of raising new financing
In October 2019, Euromoney predicted that Figure Technologies would close in on a Series C funding, and their prediction came true in December 2019. Having already raised $65 million in series B funding, one might wonder why more money was needed. However, Mike revealed that the company would use the $103 million raised in the Series C funding to push Figure Technologies into the $1.4 trillion student loan market. Considering that he had allowed SoFi to offer student loans that wound up delinquent, we can only hope he will not make the same mistake with Figure Technologies.
8. The inspiration that resulted in its establishment
Running a company demands one to have a passion for whatever the products and services you will be offering. Mike Cagney had been interested in blockchain technology for a long time and had even looked at what it entails, but only in passing. However, during winter 2017, he decided to take it up seriously and learned everything there is to know about blockchain. When he finally figured the intricate details and how to run the platform, he thought about launching Figure Technologies and started working towards founding the company.
9. Why the company was started
If you want your business to have customers, then it must be fulfilling a need. Mike found out the gap that needed to be filled. People did not understand the value of blockchain; hence he wanted to show clients the economic benefits they would be reaping by adopting the technology. They created value by allowing the blockchain to function as a ledger, registry, and exchange such that assets live on chains instead of tokens being used to represent off-chain assets.
10. How did it promote clients to adopt blockchain technology?
It is one thing to have a product that can be of use to a client, but it is quite another to convince them that they need it. Therefore Future Technologies figured out they might as well promote the business by offering a service that most clients would be enticed to take up. To further encourage clients to adopt blockchain, the company has a lending business within it to facilitate origination, financing, and sale of assets.
11. Why the firm is bound to be successful
Mike has indeed learned from his past mistakes at SoFi, and he is not ready to have his new company go down the same route. While at SoFi, there was no accountability for the actions of employees; they could do whatever they want for as long they delivered impressive results. There was also a lack of women empowerment. However, at Future Technologies, it is more than just retaining employees based on performance; it is about placing executives in the corner office because they are capable of the roles assigned to them. Mike believes the company has a bright future because, as he told Digital Currency Group, Future only hires the best and embraces diversity.
12. Its first-ever product to be launched
In October 2018, Figure launched its flagship product, Figure Home Equity LoanPLUS. The product allows customers to avoid the long wait and hustle that other financial lending institutions require. While other lenders take 45 days to approve a loan after customers fill out a pile of papers, Figure takes only five minutes to approve and release funds within five days. Best of all, customers can do it all online. The product also does not have hidden fees such as appraisal fees, late fees, pre-payment penalties, or title fees, which makes it cheaper in the long run.
13. Why it introduced Figure Home Advantage (FHA)
In late 2018, Figure launched a new product, Figure Home Advantage, to offer homeowners an alternative to reverse mortgages. The Chief Marketing Officer said that homeowners nearing retirement or are already retired, rely on home equity as the primary source of money. Therefore the company found that with mortgages, retirees would have cash flow problems due to increased interest rates. The best thing about the product is that besides retirees being eligible, everyone else is welcome to leverage their home equity since there is no age limit.
14. It does not market HELOC (Home Equity Line of Credit) product as a blockchain-based offering
Figure avoids using technical jargon in its marketing of HELOC. One executive, Jenifer Mitrenga, agreed they do so intentionally since they do not want to confuse customers with unnecessary technical terms. Jennifer further explained that they noticed customers are only interested in an improved product that is affordable and efficient.
15. Four of the co-founders are women
Perhaps to save his face and be in the good books of the public and investors, Mike decided to involve women only in his startup. Therefore apart from his wife, June, Mike collaborated with three other women to establish his company. Alana Ackerson, who was SoFi’s Vice President, now serves as the Chief People Officer at Figure, while Cynthia Chen is the Chief Risk Officer. Cynthia is also a venture partner at Danhua Capital, and before joining Figure, she worked at OnDeck as the Vice President of Risk Management. Finally, there is Sara Priola, who is the General Counsel and, in 2019, established The Law Office of Sara Priola.
16. The motivation behind opening an office in Reno
As much as Figure wants to expand to as many locations as possible, they do so after careful planning. Therefore in December 2018, the company announced it would be opening up an office in Reno, Nevada. By the time they went public with the news, the office was already housing 17 full-time employees, according to the Economic Development Authority of Western Nevada. The choice for the location was so that Figure Technologies would take advantage of the logistical benefits. It also would make use of the talent pool while also investing in the academic community.
17. It reached unicorn status
Mike Cagney is one person who knows nothing about failure; his first startup was successful, and Figure Technologies has followed in its footsteps. After only two years, the firm reached unicorn status after its valuation got to $1.2 billion during the series C funding round. The term “unicorn” was coined by Aileen Lee in 2013 to refer to companies whose value is at least $1 billion. It is an analogy to the mythical creatures since such companies are rare.
18. The Series C funding had some strings attached
Although Mike was entrusted with millions of dollars, investors were still aware of his past and had to be careful. Therefore even if they gave Figure Technologies the money, they still needed to have someone on the board to ensure their money was well utilized. Morgan Creek Digital led the Series C funding, and as part of the financing, they had Anthony Pompliano join the board. Anthony is a co-founder and partner at Morgan Creek Digital; hence with him on the board, the company’s investment will have proper oversight.
19. Its plans for the future
Although three is no specific timeline for the company’s plans, they are hoping to launch a money market soon. So far, the products introduced have been successful, and Figure Technologies wants to have a more diverse offering. Therefore other lines of business it is looking to venture into include checking accounts, unsecured consumer loans, and wealth management. All these prospective products will be offered through partner banks.
20. Its main competitors
SoFi is a primary competitor of Figure Technologies, which is quite motivating for Mike as he seeks to prove that he still got what it takes to be at the helm of the company. Figure Technologies is expanding its portfolio to include what SoFi offers; they even added student loan refinance and boasted of having originated at least $700 million in loans. Other competitors include Unison, Affirm, Point, Built Technologies, Hitachi Capital, Pay4Later, LendPro, and a few more.