Nexo is buying Vauld, marking more DeFi consolidation

2

Rocket

Power Score: 51.66

Momentum Score: 35.29 (4)

HQ: Detroit, MI

CEO: Jay Farner

On Power

When not making award-winning Super Bowl ads , Rocket is reinventing itself as a fintech platform, betting that the lending expertise the company has built over the last 35-plus years can translate beyond mortgage origination success . Rocket, which may be more familiar to some people as Quicken Loans , became the country’s largest mortgage lender in 2018 and hasn’t given up its lead, amassing a roughly 9% market share . That said, the company has endured a tough last year, with its valuation falling more than 40%. During that time, macroeconomic conditions have slowed mortgage originations and fears that a new real estate bubble is on the horizon have made future growth prospects murky. As a result, the company has made an effort to diversify its products by investing in a division that provides tools for mortgage brokers , a separate unit from its mortgage origination business. Despite current uncertainties in the housing market, Rocket CEO Jay Farner expects to eclipse 10% of the mortgage market share this year.

On Disruption

While other companies have focused on the super app ecosystem, Rocket has used the last year to double down on lending. And it’s found some interesting ways to do so. At the end of 2021, Rocket acquired Truebill , a personal finance app, in a move the company says will help it build an end-to-end platform around its lending product. And in October, the company partnered with Salesforce , which will give Rocket a chance to offer its mortgage-as-a-service offering through Salesforce’s financial services cloud. Rocket isn’t the only company offering the service, but Rocket’s size and Salesforce’s penetration into the operations of smaller financial institutions represents a big opportunity to right the ship as the company expands beyond the direct-to-consumer model.

Tea Leaves

Rocket was caught up in the meme stock phenomenon of early 2021, spiking 114% over the course of three days in March 2021 before ultimately falling somewhat significantly throughout the rest of the year, dipping well below its pre-meme stock pricing. In fact, on each day from July 1 to the end of the year, the company’s stock closed lower than its median closing price from the first half of the year. That said, Rocket’s sizable revenue total has made it a Fortune 500 company, though a dip in earnings in the third quarter of 2021 could spell a drop from its current post at No. 194 . In an interview with Protocol, Farner said the company has put many of its resources into modernizing its data and tooling and also noted that he sees crypto playing a “significant role” in Rocket’s business in the coming years.

They Said It

“I think banking will continue to shift and change. And we're uniquely positioned to be that business that sits between a client and their needs and providing the service, but I think we'll watch and see where the future is headed. Traditional banking may not be the right path, at least for us.” –Farner in a September 2021 interview

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