SimpleNexus to be Acquired for $1.2 Billion
Today nCino, Inc, of Wilmington, North Carolina, announced it has entered into a definitive agreement to acquire SimpleNexus in a stock and cash transaction valued at approximately $1.2 billion. SimpleNexus offers a homeownership SaaS product connecting borrowers, loan officers, real estate agents, and settlement service providers throughout the entire home buying process via a smart phone app. The Lehi-based real estate fintech raised $108 million Series B investment in January of this year, as covered by TechBuzz.
Pierre Naudé, CEO of nCino says "the acquisition provides a natural expansion of nCino’s capabilities that were historically focused on addressing the technology needs of depository financial institutions to the U.S. point-of-sale mortgage market.”
The acquisition expands nCino’s serviceable addressable market by over $4 billion.
“When we first started nCino, our mission was clear: to transform the financial services industry through innovation, reputation and speed. Today, we take another major step forward in executing on that mission by welcoming the talented team at SimpleNexus and their best-in-class, cloud-based homeownership platform into the nCino family,” said Naudé. “Just as nCino has transformed the process for commercial, small business and retail lending, treasury management and account opening, SimpleNexus has streamlined the many stages of the homeownership process into a single, seamless journey. Their innovative solution and deep subject matter expertise in consumer front-end technology will extend our capabilities to the U.S. point-of-sale mortgage space and enhance nCino’s mobile and point-of-sale offerings, unlocking additional opportunities and value for our customers and their clients.”
SimpleNexus has become a leading digital homeownership software platform in the U.S., serving more than 300 independent mortgage banks (IMBs), over 80 banks and credit unions, and more than 41,000 loan originators nationwide. During the first nine months of 2021, more than 1 in every 7 mortgage originations in the U.S. leveraged SimpleNexus’ software.
Both companies are cloud-native and use a per-seat subscription-based revenue model, enabling predictable, recurring financial results that are not based on volatile mortgage transaction volumes.
nCino and SimpleNexus will work together to continue innovating for the IMB community while accelerating the adoption of the SimpleNexus homeownership platform by U.S. banks and credit unions, where nCino currently has over 1,100 customers, only 40 of which overlap with SimpleNexus' customerbase. The two companies plan to work together to leverage SimpleNexus’ consumer front-end technology and domain expertise to accelerate the development of nCino’s mobile and point-of-sale offerings across additional lines of business.
“This is a truly exciting moment for SimpleNexus, and we are eager to be joining forces with the nCino team, with whom we share similar technology visions, strong cultural alignment and a commitment to taking care of our employees and customers,” said Cathleen Schreiner Gates, Chief Executive Officer at SimpleNexus who will remain as CEO of SimpleNexus after the transaction. “Our industry-leading, mobile-first homeownership platform will complement nCino’s Bank Operating System to create even greater value for IMBs and financial institutions across multiple product lines and digital channels. Together, our best-in-class, cloud native platforms will significantly strengthen how we serve our customers.”
nCino will acquire SimpleNexus for approximately $240 million in cash and approximately $960 million (13.2 million shares) of nCino Common Stock, designed to maximize alignment and incentives between the two companies. nCino plans to retain the 300 current SimpleNexus employees. SimpleNexus' total revenue for the past year ending in September 30, 2021 amounted to $40.6 million with a net revenue retention rate of 163%. Taking into account SimpleNexus' October 2021 acquisition of LBA Ware, total annualized revenue for SimpleNexus amounts to approximately $54 million.
The transaction is expected to close by the end of nCino’s fourth fiscal quarter ending January 31, 2022 and is subject to receipt of regulatory approvals and other customary closing conditions.