A year of change

At Blend, we are used to adapting to change; indeed, we were born of change. We founded Blend in the wake of the last housing crisis to change the lending process — specifically choosing to use data, instead of documents, to make lending faster, easier, and better. Following our success in mortgage, our customers asked us to use our tech skills to change broader consumer credit, an area we had limited experience with at the time. When COVID hit, we again undertook another major change — to create a digital end-to-end process that would enable contactless lending. And today, we are faced with a new challenge — rapidly rising interest rates and an uncertain world economy.

Throughout these pivotal moments, we’ve adapted and focused on building banking software that helps you deliver unmatched experiences to your customers. The changes in today’s macro environment have presented the housing finance industry with new challenges. Mortgage volumes are decreasing faster than expected and moving downward quickly as the Fed raises interest rates. Once again, we at Blend are responding — in ways that enable us to continue to build for the long term.

We know technology will play an even larger role going forward in helping drive the changes needed for this next chapter. We are responding by renewing our focus on the technology that got us here and improving our capabilities to drive even better, more efficient experiences. However, we also realize that with volumes down, we need to make some changes. Some of our operational businesses, such as our title insurance agency in particular, are seeing the negative impact of higher rates and reduced refinance activity.

As a result, we made the difficult decision to lay off about 10% of our employees. Making these decisions is never easy, but we are committed to making our employees’ transition as smooth as possible. We have sought to treat our employees with the same values our customers have come to expect from us — with dignity, transparency, and fairness. Every impacted employee will be eligible to receive at least 18 weeks of pay and continued health insurance, vesting of any previously granted equity into June, and 12 weeks of outplacement services. These are our colleagues, and they have been part of the Blend story that I have cherished.

Some of you may wonder how these changes will affect your business. Most of the decisions we made were a function of changes in refinance volumes. With lower volumes, we need fewer people to execute and support those businesses. However, we are committed to continuing to serve you in the way you have come to expect from Blend. In fact, we believe that our renewed focus on the technology that makes Blend special will make us an even more valued partner to you.

My commitment

I have gotten to know many of you personally over the last decade. You are not only our partners, but my friends. Those of you who know me understand that delivering long-term customer value is absolutely core to me and the entire Blend team. We are building a technology platform that your team can rely on for decades. And we’re just getting started. I said something similar when we took Blend public last year — that the capital we raised would serve as a foundation for investment in the long term. That hasn’t changed.

The digital transformation of banking is just getting underway. The events of the past few years have accelerated this change. I’m hearing daily from you and your teams an increased sense of urgency around transforming the process as it exists today. As long as consumers and small businesses need access to financial services, we can collectively continue to drive friction out of that process so it can reach broader and deeper audiences. That is the promise of technology, that is the reason you bet on us over the years, and that is the reason we will continue to build things that matter.

This is especially true in these tough times for the industry. Technology is needed now more than ever. Part of the core value of Blend is driving real savings to you and your customers, and we remain as committed to that today as ever. I was talking to the CEO of one customer last week about the recent, sharp changes in interest rates. He paused briefly before saying, “This is when winners are made.” You’ve been investing in delivering a new way of serving your products for years. We’re ahead of the game, and it’s time to use this as an opportunity to build a foundation that will last well into the next decade.

As we move forward together, my commitment to you is that we will continue to provide you with compelling value. We will continue to invest in the things that matter. And we will continue to find ways to help you serve your customers better each day. In a sea of change, these principles remain our north star. It’s still Day 1 at Blend. We’re just getting started.

Forward-looking statements

This blog post contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally relate to future events, future performance or expectations and involve substantial risks and uncertainties. Forward-looking statements in this blog post may include, but are not limited to, our expectations regarding our business, employees, product roadmap, future products/features, the timing of new product/feature introductions, market or growth opportunities, plans for future operations, competitive position, technological capabilities, and strategic relationships, as well as assumptions relating to the foregoing. These forward-looking statements are subject to risks and uncertainties that could cause actual outcomes to differ materially from the outcomes predicted, including those set forth in the section titled “Risk Factors” included in our filings on Form 10-K or Form 10-Q with the Securities and Exchange Commission. All forward-looking statements are based on information available to Blend and assumptions and beliefs as of the date hereof. Blend does not undertake a duty to update any forward-looking statements, except as required by law.

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