Hi everyone, thank you for joining us at the 28th Annual Needham Growth Conference. And today I'm excited to have with us Vishal Garg, CEO of Better Home & Finance. And so I'll turn it over to him to kick off the presentation. Thank you.
Thank you so much, Ross. Really excited to be here. This is my first time at this conference, and excited to tell you a little bit about Better, a company I founded about 10 years ago to revolutionize the home finance business. We have, over those 10 years, built the first originally machine learning-driven AI matching engine connecting consumer credit data, income data, asset data, and property data with the characteristics and preferences of 45 different investors on our platform, and manufacturing mortgages, and more recently home equity loans nearly instantly for American families, and in doing so, saving them time, money, and making the entire process cheaper, faster, and easier, just plain Better. Over the past couple of years, if you go to the next slide, the company has gone through a transformation.
We built the company over the first five years. We scaled it from $500 million in annual volume in 2016 when we first launched to over $58 billion in volume on the back of a low-interest rate environment and providing cheap, fast, easy refinances online to consumers. Over the past couple of years, we've diversified our product mix and reacted to the increase in interest rates and the change of our product mix to mostly a purchase business and a HELOC business as the market for refinances has simply been challenged or non-existent in a 6%-8% interest rate environment that we've had in the past two years. As we've taken our machine learning engine and overlaid GenAI on top of it, we've finally been able to achieve unit economics that have now allowed us to grow.
In the past year, we have been able to grow the business in terms of loan volume up by about 20%. We grew revenue by about 50%, and we grew our home equity business over 10x to become the fastest growing home equity platform in America today. The unit economics, which is something that we've been focused on dramatically over the past four quarters since we last spoke about the company, have undergone dramatic improvement. So we've been able to increase the revenue per loan that we generate as a result of being faster to respond to consumers with Betsy, our AI loan officer, from about $7,400 a loan to $8,500 a loan. And we've been able to increase the contribution margin from $500 a loan to $1,700 a loan, which is a level that we haven't seen since 2021 in our business.
And that has been powered mostly by savings in the labor cost per fund, which have come down from $2,900 a loan to $2,500 a loan. Smart application of data costs where the AI only pulls the data when the data is needed rather than when the humans think that the data should be pulled. And that has permitted us to continue to invest in customer acquisition and continue to drive efficiencies. Our labor cost per fund today at $2,500 is industry-beating compared to the $9,000 plus that it costs the rest of the industry to make a loan. And that has helped us scale our platform not just to our direct-to-consumer model, but also through our retail mortgage lender and mortgage broker platform, which is Tinman AI, and allowed us to dramatically scale that business and onboard mortgage brokers to the platform.
That platform side of our business now constitutes approximately 45% of the total revenue that we generate. Now let's talk a little bit about Tinman. Tinman is built for the home finance market, which is absolutely large. It is the largest asset class in the world. U.S. homes comprise about $34 trillion in total asset value. The mortgage market is about $15 trillion, with origination volume ranging from $1.5 trillion in a bad year, like 2023, to almost $5 trillion in a good year, like 2021. We expect core growth in the mortgage market. So depending on where rates end up shaking out in 2026, people are expecting just about 20% growth to about $1.8 trillion of core volume. And at peak in 2021, when the model was dominated by refinances, the company was at almost 2% market share in the overall mortgage market.
And we're working hard to kind of get back up there. The way we're doing it is different this time. It's not through direct-to-consumer. If you go to page five, please. It's through leveraging Tinman, which is our unique platform built end-to-end from click to close for the mortgage industry, the first of its kind built in the past 25 years, competing against incumbent systems that were last built when Windows 95 was out, and built around a system where only one person can be in a file at a time, and more data entry portals rather than an algorithmic matching engine between consumer data, property data, and investor criteria.
So Tinman takes what is, in the rest of the industry, eight different systems: a point-of-sale system, a pricing engine, a loan origination system, a CRM, an eligibility engine, a document and disclosures engine, a compliance system, and the closing, and takes that and puts it all in one place and with one data set, with one workflow all the way through, with everything that is happening on the file happening in one system. That data set that we have compiled, that learning data over the past 10 years on over $110 billion of loans originated, has been fed to our Betsy MCP server.
And in addition to not just the data, but the full context that is embedded within 12 million recorded phone calls, over 5 billion pages of underlying documentation, and the rules across all 45 different investors, has enabled us to build an engine where now we have a very, very powerful AI loan officer, AI loan processor, and AI underwriter. The only one of its kind in the industry that can take a consumer from click to close with no human intermediation whatsoever. 70% of our loans today are able to be done as one-day mortgages compared to what it takes the rest of the industry weeks to manufacture. And 44% of our loans today are able to go from lock to commitment letter in under a minute, almost a one-minute mortgage effectively intermediated entirely by the AI.
And we continue to see growth in that percentage going up and up and up from there to the point where we estimate that over 90% of our loans over time in the next couple of years will be done entirely via the AI. That will have a dramatic impact on our labor cost per fund, which we believe that we will be able to drive to less than a total cost per fund of $1,000 a loan, which will further increase our competitive advantage vis-à-vis the legacy players in the mortgage industry. If you go to the next slide, please. How are we taking this platform and monetizing this? When we originally scaled in 2016 to 2021, we scaled as a direct-to-consumer originator.
We now are powering local mortgage brokers who we traditionally competed with, local retail mortgage lenders that we traditionally competed with, and enabling them to use Tinman AI as a platform to build their businesses locally on. We provide a variety of different components of the platform. So we enable not just the software layer, but also we provide them the entire back office processing, underwriting, closing layer, the capital markets engine that we've built, which allows them access to not just one or two investors for their loans, but actually 45 different investors all instantly matched at the same time, not relying on humans to make that decision, as well as compliance and sales if and when they need it.
We also are now deploying for a variety of financial institutions and banks Tinman AI as a software where they're able to use the platform with their own salespeople and their own loan processors and their loan underwriters to make their business dramatically more powerful and dramatically more scalable. This is really interesting because just as we have been scaling and bringing this product to market, providing the ability for these companies to move from eight different software vendors integrated together by multiple middleware and consultants, all done on a per-seat or per-hour basis into an outcome basis, which is what Tinman is built on.
We have seen the market start to change and loan volume go up, and the overall number of loan officers in the industry, which has declined by over 50% in the past three years after the boom of 2020, 2021. It's created an imperative for our enterprise partners to go and put something new in place to improve productivity in a way that has not been an imperative in the past several years. As such, we have signed a number of major contracts. We have onboarded a top five U.S. personal financial services platform with over 50 million consumers. For this platform, we're providing a mortgage broker in a box product where we are able to help them get into the mortgage business and monetize the loans that are made to their own customers.
We provide not just the software, but we also provide the entire back office software, fulfillment, capital markets, sales, and compliance engines that this platform is using to monetize their customer base and get into the mortgage business. Two, where we've partnered with a top five U.S. non-bank mortgage originator. This is an originator that does over $50 billion of volume per year, and they are implementing Tinman and replacing the incumbent solution that has over 80% market share in the mortgage industry with Tinman, which is quite a feat for someone to adopt as a top five mortgage originator the core system that they work on.
We will be launching with them next week, actually, for HELOCs and HELOANs, and then expanding to mine the entire $300 billion+ MSR book that this partner has, along with the multiple thousands of loan officers and hundreds of branches that they have in their retail network. We have publicly announced that Finance of America, the Blackstone-funded mortgage originator that is the largest reverse mortgage originator in the country, has partnered with us to launch with HELOCs and HELOANs and then expand to mortgage and then do that not just for a private label experience, but also to implement their own custom version of Betsy, which enables our AI loan officer branded in their fashion to effectively intermediate all of their customer offerings eventually onto Tinman. We have launched with Finance of America and are very pleased with the progress that we're making with them.
In addition, this last year, in the past six months, we have dramatically scaled Neo, the mortgage platform that we brought on board this time last year. In Q4 and Q3, they funded more volume than they did in all of Q1 and Q2, and we are seeing substantial growth in not just funded loan volume on the platform, but also in the productivity metrics for the Neo loan officers on our platform. We have been able to help them increase their business pretty dramatically. We have helped them increase their loans funded per loan officer. We've helped them lower their cost to fund.
And we believe that that is a very compelling business model change for an industry, the retail mortgage industry, that has had basically stagnant productivity for the past 15 years for us to be able to onboard a platform onto ours and enable them to generate double-digit improvements in their business within the space of six to nine months. And lastly, we have onboarded and launched with a bank partner, a small to medium-sized bank here in the Tri-State area. And we are experiencing good growth with them. And we're pretty excited to continue to grow with them and share with you progress as we develop on that platform. If you go to the next slide, please. Fundamentally, what we've built is the first full-stack AI mortgage platform. It's simpler, it's cheaper, it's faster, it's better.
Its pricing model is hugely disruptive to the very legacy-driven business model of the software stack and the people stack of the mortgage industry. It takes a mortgage company today still over 50 days to make a mortgage. It involves over 28 people. It involves over 800 pages of paper, and it costs $12,000 to do, and we believe that presents a unique opportunity for us to step in and modernize the entire stack and move them on to the Tinman AI platform and in doing so help build a great business that we expect to grow pretty rapidly over the coming years. We've provided some guidance. We've publicly stated that we expect loan volume at Better to double between the volumes that we evidence in Q3, Q4 to over the next six months.
And as we do that and grow beyond that, we expect to achieve Adjusted EBITDA profitability by the end of Q3 2026. Thank you so much for taking the time to listen to me about Better. And I'll open it up to questions.
And if anyone has any questions they would like to submit, please just enter them in the chat box and I'll read them. And all questions will remain anonymous. So I'll give a few moments for questions to generate. Actually, while we wait for some questions to come in, maybe I'll start with one of my own. So Vishal, what are you most excited about going into 2026 and beyond? What are some things you think investors might not totally understand or are missing about your story?
Totally. That's a really great question. I mean, I was just in Washington for two days this week, and the tone in Washington is so dramatically different than what we saw three months ago, six months ago. Affordability is such an important theme, and affordability starts with things that consumers who vote can feel in their pocket. And the things that people who vote can feel in their pocket is their monthly mortgage payment. That is the largest payment that they make in their month, and then their gas prices. Now, the president's done a great job on gas prices, and the team is energized and putting forth a number of solutions to dramatically lower the cost of financing for American homeowners. And they're really focused on it, and so we think that that provides a macro stimulant for our business, which has been lacking.
We have been swimming upstream for three, four years, each time thinking that things are going to get a little bit better, that inflation is going to come under control, and that rates are going to eventually come down. We've had two false starts. We had one in late 2024, and we've had one in the middle of 2025, and we believe that we are finally in a path to scale our business pretty dramatically with the macro picture actually providing a tailwind rather than a headwind.
Great. Thank you, and then I was also wondering, maybe you could talk a little bit more about the competitive environment you're facing right now. Who are some of the competitors? and I think you definitely touched on this during the presentation, but what makes Better stand out?
Totally. I think what's unique about us is that our business today is almost 50/50 platform and direct-to-consumer, and it's likely going to be 80% or 90% platform and 10% direct-to-consumer. In direct-to-consumer, our competition has been basically the same. It's Rocket Mortgage. It's loanDepot. It's the other large originators in the country that reach out to consumers directly. That business has been severely challenged over the past couple of years as the pool of consumers that are available to refinance, which is the best product that you can do direct-to-consumer, has been pretty limited because most of the American public had a rate that was below 6%. We now have about 21% of the American public has a rate over 6%, and as rates come down, that group of people is coming online and looking to refinance.
And so we think that there's a real tailwind in enabling those consumers to save money. And with our AI debt advisor, Betsy, we are uniquely positioned to do that because not only will Betsy do the refinance for you entirely from click to lock, but actually will recommend for you all the other debts you should pay off. And we're starting to see those consumers who use Betsy to pay off their other debts along the way and consolidate them into a cash-out refinance save an average of $2,400 a month. And so that's pretty significant savings versus those who just get a rate-term refi.
So we think that that's a unique competitive advantage that we have vis-à-vis the other players who are still basically mostly call center companies that are using AI bots to either schedule appointments or scan and take in optical character recognition powered by AI documents. So we think that that's fundamentally different. On our platform business, what is great is our competition has been really fragmented. There has been very little consolidation. There has been some buying of these businesses, the most notable ones being Encompass and Black Knight, which were acquired by ICE, and the large pricing engine, Optimal Blue, which was acquired by ICE. There's others that are in the market, nCino and others providing different components of the mortgage process, Blend providing a point-of-sale solution.
But there is no player providing an end-to-end click-to-close solution with an underwriting engine and a capital markets engine in one flow and one stack. And certainly, there's no one providing that on a per-funded loan basis. So we believe that enabling mortgage brokers, retail mortgage lenders, and mortgage companies, as well as other fintechs and banks as they seek to re-enter the mortgage business as capital rules get better, we believe we have a unique value proposition. Not only is the technology best in class, but we're charging on a per-funded loan basis. So they are paying for their major expense at the same time that they're booking the revenue. And that makes us, I think, uniquely attractive. And that is why we have seen such great uptick for a product that is effectively 12 months old.
Great. Thank you. That was really helpful. And then, I mean, obviously, AI has been a major tailwind for Better. It's built into your company. So I think I want to know, I guess, what's next for your company with using AI? I mean, Tinman and Betsy are both great products. Do you have any new products you're thinking of or any ways you're going to expand either of those? Or internally, how are you using it to maybe improve processes?
As we built the business on a machine learning platform. When GenAI came out, we thought, holy crap, it came out 10 years earlier than we expected. And then we ran toward adopting it. And what we discovered is the way we have stored our data in a fact graph, along with all the resulting context around every decision stored in the platform, is so unique because that is a set and a form of data storage that the LLMs are able to read in under 100 ms to understand everything that has happened with the file. It's something that no human can actually do at the same level. And then from there, they're able to compute on a typical mortgage, the range of options that are available are in excess of 21,600 options for a consumer every time the consumer chooses a different permutation.
And it's able to compute across all of those and tell you what the best one is in a way that no human loan officer can. What the human loan officer obviously can bring is empathy, experience, and psychological handholding. And so we're now able to empower that so that the humans can do the thing that they do best, that our mortgage broker partners and retail mortgage lenders can do what they do best. And we make them substantially more efficient. Our goal is to continue to improve on that and have the AI do more and more of the process. It's not nearly at 90% yet. So there's a long way to go. I think we talked about that a little bit earlier. And then from there, continue to bring that to the rest of the industry and gain more market share.
Great. Thank you, and I'll give it a few more moments if anyone from the audience would like to submit a question. I think while we wait, I'll ask my last one here. Is there anything that keeps you up at night about either the industry or the business? Is there anything that kind of has you worried going into the mid to long term?
I think I worry about affordability, and I think I worry about access and whether the supply of homes will be there to actually meet the demand that we know already exists. We ourselves at Better have over two million people that we have pre-approved in the past four years that have not yet bought a home but got pre-approved by Better, and I worry about either if rates go down very rapidly, how will we service all of those people that come through the door? So I think I worry a little bit about that, making sure that we can scale adequately to meet the demand when our moment in the sun comes, and then the second is I worry about those people being able to actually find the houses, and now the administration is working on ways to loosen up that supply.
I think the most interesting one that they're talking about is a doubling of the capital gains threshold from $250,000 individually and $500,000 per couple and doubling that to $500,000 and $1 million per couple for a limited period of time to compel those who are "stuck in their houses" because they've got a low rate to give them an incentive to sell. And we think that that might be a really, really interesting thing. But I would say those are the two things I worry about: our ability to scale, to meet the moment that is in front of us, and the fact that the consumers will be able to find the houses to buy. With respect to HELOC demand and with respect to refinance, we think we have just it's open season out there now with rates kind of being less than 6% on better.com today.
We're very, very competitive, and so we're just rushing to meet that demand.
Yeah. So it's a really exciting time to be in the mortgage business right now. So I'm sure.
Yeah. It's been pretty dark for four years, but now it's turning.
Great to hear. So I don't think we have any other questions. So with that, thank you, Vishal, for the presentation. That was really excellent. I appreciate it.
Thank you for having me on. Cheers.