[UPDATE: The article has been updated to reflect that Sindeo did not detail a reason for the company's closure.]
San Francisco-based mortgage technology firm Sindeo, which entered the market four years ago, announced Tuesday evening that it is closing its doors immediately.
Sindeo’s CEO, Nick Stamos, published a letter on the company’s website announcing the closure.
Here's an excerpt of the letter:
Four years ago, Ori and I set out to create a new type of mortgage company where technology makes things easier and puts people first. We hired incredible people to help us build this business and we grew rapidly.
But, startups are hard and simplifying the highly regulated, complex business of mortgages is even harder. I believed we had overcome the biggest hurdles, but unfortunately, we didn’t. Today, we made the difficult decision to wind down Sindeo.
Stamos and co-founder Ori Zohar established Sindeo to disrupt the mortgage space by changing the way people search, shop and secure a mortgage, securing more than $15 million in funding to start the company.
Stamos does not detail the reasons behind the closing.
The company focused on compliance early on, hiring was Jobe Danganan as its general counsel and chief compliance officer. Danganan was an enforcement attorney-advisor at the Consumer Financial Protection Bureau, and before that served as senior investigative counsel at the U.S. Financial Crisis Inquiry Commission.
In 2016, the company hired former Fannie Mae executive Deepak Kumar as COO and CFO in 2016, and raised capital in both 2015 and 2016 to bolster its mortgage business.
Stamos laid out the company's goals in a 2015 HousingWire article:
Sindeo has exploded on the mortgage scene since its start in 2013. The company is expanding into metros in Texas and Florida in the short term, but has goals to cover metros throughout the country in the next few years.
“Our goal next year is $1 billion in mortgage originations. We think that by the end of 2016 we will be able to help customers in every state in the U.S. in buying their home or refinancing their mortgage,” Stamos said.
Zohar was recognized by HousingWire as a Rising Star in 2016, and was quoted in that article on the difficulties of managing a startup.
A startup is a roller coaster – some days you feel on top of the world and some days you feel like you’re falling. I keep a notepad on my nightstand where I jot down everything that’s on my mind, which lets me go to sleep with a clear head. It helps me get a fresh start every day — and get back into the positive.
In Stamos' posted letter, he recognized the company's accomplishments and its people.
Here, again, from Stamos' letter:
I am simultaneously devastated, as well as incredibly proud. While Sindeo as a startup has failed, our people did not. As a matter of fact, we did what everyone said couldn't be done.
- We built a place where people could shop and apply for a mortgage from a robust marketplace of over 1000 loan programs, with one single application and one credit check.
- We secured partnerships with some of the top real estate and consumer finance brands.
- We helped our clients save millions of dollars on their home loans.
- We built a people-centric brand, putting the needs of Sindeo's clients first.
The accomplishment I am proudest of is our customer satisfaction scores. Sindeo's Net Promoter Score (NPS) this year is 81, compared to an average of negative three from the top banks. Sindeo achieved Zappos and USAA level service. It was hard, really hard, but Sindeo was delivering on our mission.
Unfortunately, it wasn't enough. The majority of the staff and leadership team have had their jobs eliminated today. A very small team will be kept on for a short period of time to help our clients successfully close their loans that are already in process.
I am devastated for our employees, their families, our partners and our investors who believed in us, and worked so hard to build Sindeo. We have very talented people who need jobs today. Hire them. They are truly innovators and some of the smartest, most dedicated people I've ever worked with.
To everyone who has supported us, who believed in us and who stuck with us during the toughest of times, thank you. We are eternally grateful for your support, and I will never forget everything we did together at Sindeo.
