Rocket Companies scoops up Truebill for nearly $1.3 billion in major fintech play – Yahoo Finance

Rocket Companies CEO Jay Farner wasn’t kidding around when he told Yahoo Finance Live in November he was on the hunt for acquisitions to diversify his company and fetch a higher trading multiple for a stock that has been under pressure. 

And Farner is looking to fast-growing fintech to help pull both those goals off. 

The company said Monday it would acquire personal financial app Truebill for $1.275 billion in cash. Truebill was founded in 2015, and currently has 2.5 million members who use the platform to manage subscriptions and bills as well as budgets. The company says it currently analyzes $50 billion in monthly transaction volume and has saved consumers more than $100 million since its founding. 

Truebill was last valued at $500 million after raising $45 million in capital in June of this year, according to Yahoo Finance sister publication TechCrunch. The uptick in valuation for Truebill reflects a hot market for fintech plays, something seen recently in Intuit’s $12 billion deal in September for Mailchimp and its $8.1 billion deal for Credit Karma late in 2020.

“We are very impressed with what Truebill has created — providing a simple, intuitive client experience to help its users save significant money. The company is a perfect fit for the Rocket platform. Truebill’s work helping Americans keep track of their finances and providing guidance that leads to better financial outcomes follows the same philosophy as Rocket Companies — leveraging the power of technology to remove the friction from complex transactions — and applies it to everyday life,” said Farner in a press release. 

For Farner and Rocket, the play for Truebill reflects a few elements that have surfaced on the company this year. 

First, Farner has begun to diversify Rocket away from solely a mortgage servicer in a bid to create more stable forms of revenues and better target consumers. The company has recently made forays into financing for solar panels and created a marketplace to buy vehicles, for example. 

Unfortunately for Rocket, the market has continued to punish its stock as it still sees the company as a mortgage play in front of higher interest rates in 2022. Rocket shares are down 23% year-to-date, according to Yahoo Finance Plus data, compared to a 23% gain for the S&P 500.

A screen displays the logos of Rocket Companies (RKT), the parent company of Rocket Mortgage and Quicken Loans, in Times Square during the company's IPO on the New York Stock Exchange (NYSE) in New York City, New York, U.S., August 6, 2020. REUTERS/Mike SegarA screen displays the logos of Rocket Companies (RKT), the parent company of Rocket Mortgage and Quicken Loans, in Times Square during the company's IPO on the New York Stock Exchange (NYSE) in New York City, New York, U.S., August 6, 2020. REUTERS/Mike Segar

A screen displays the logos of Rocket Companies (RKT), the parent company of Rocket Mortgage and Quicken Loans, in Times Square during the company’s IPO on the New York Stock Exchange (NYSE) in New York City, New York, U.S., August 6, 2020. REUTERS/Mike Segar

But Farner said it’s time the market thinks of the company differently. 

“I’m very hopeful that we’ll start seeing our company trade more in the fintech multiple that we believe it deserves,” said Farner at a Goldman Sachs conference earlier in December

One way to get that fintech multiple, well, is to acquire a fintech as it’s doing with Truebill. 

Said Farner in November, “I love the value of the stock at the price that it’s currently at. I’m also watching the market closely because as you think about where we’ve been the last 24 months, especially with fintechs, I think the opportunity to look for acquisitions that could fit in nicely to our platform will present itself as we go into 2022. So, it’s great to be sitting on that level of capital. We’re a very capital light business. We don’t require that capital. And so we can use it to buy shares back. We can use it to make key acquisitions. We can use it to do another dividend like we did in the spring of this year. A lot of opportunity here for us to add value to our platform.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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