In a significant financial move, Blend Labs, Inc. (NYSE: BLND), a leader in cloud banking services, along with Austin-based Haveli Investments, a technology-focused private equity firm, announced a pivotal $150 million investment in the form of convertible preferred stock. This investment, notable for its zero percent coupon, aims to further strengthen Blend’s financial position and balance sheet, ensuring its long-term growth and value creation in the increasingly competitive banking software market.

Haveli Investments purchased $150 million of Series A convertible preferred stock from Blend Labs, which will be convertible at $3.25 per share. This conversion rate is a 31% premium over the closing price on April 26, 2024, and a 13% premium over the volume-weighted average of the last 30 days. Additionally, Haveli received a warrant to purchase approximately 11 million shares of Blend’s Class A common stock at $4.50 per share, marking an 81% premium over the recent closing price. These terms not only reflect the confidence of Haveli Investments in Blend’s future but also provide Blend with the financial leverage to advance its technology and market position.

Of the $150 million raised, approximately $145 million will be utilized by Blend to repay all amounts payable under its existing credit agreement, with the remainder allocated for general corporate purposes. This strategic financial restructuring is poised to enhance Blend’s agility in product development and customer service in the field of mortgage and consumer banking software, catering to banks, credit unions, and other lending institutions.

Nima Ghamsari, Co-founder and Head of Blend, emphasized the importance of this partnership, stating, “This partnership with Haveli reflects confidence in Blend’s continued journey to transform financial services and is an important show of faith in our growth strategy.” Brian Sheth, Chief Investment Officer of Haveli Investments, also expressed enthusiasm about the partnership, highlighting Blend’s innovative platform and robust customer base as key factors in the decision to invest.

With the investment, Brian Sheth will join Blend’s Board of Directors, further integrating the visions of both companies. This collaboration is set to drive innovation in the banking sector, particularly as Blend continues to expand its capabilities in supporting a wide array of financial transactions and enhancing banking experiences for customers worldwide.

This strategic investment not only reinforces Blend Labs’ position as a key player in the financial technology landscape but also signals a strong vote of confidence in its future prospects from seasoned investors.

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