Figure buys Kiavi in USD $717 million blockchain deal

Figure has agreed to acquire Kiavi in a deal valued at USD $717 million.

Under the transaction, a joint venture between Figure and Sixth Street will acquire Kiavi's balance-sheet assets, including loans held on Kiavi's books. Figure will acquire Kiavi's technology and operating platform.

The deal combines Figure's marketplace for tokenised financial assets with Kiavi's lending business for residential property investors. Kiavi's products include short-term Residential Transition Loans and longer-term rental property loans known as Debt Service Coverage Ratio loans.

The acquisition is expected to add more than USD $7 billion in annual first-lien volume to Figure Connect and more than USD $100 million a month to Democratized Prime, Figure's blockchain-based warehouse marketplace.

Kiavi is one of the larger non-bank lenders to residential real estate investors in the United States, with more than USD $30 billion in funded loans. Last year, it generated more than USD $250 million in revenue and more than USD $100 million in EBITDA, according to the companies.

The deal also expands Figure's presence in first-lien lending, an area that has grown strongly in its existing business. Over time, adding Kiavi is expected to shift Figure's consumer loan marketplace toward a greater share of first-lien products.

Asset transfer

Figure plans to move Kiavi's assets onto its blockchain-based marketplace infrastructure, allowing the acquired loan flow to be originated, funded, sold and traded through its existing network.

Kiavi will also become the first use case for Adaptor, a new artificial intelligence product designed for agent-to-agent onboarding across different originator data systems. The aim is to standardise the way loan data is introduced into Figure Connect and Democratised Prime.

Figure said the acquisition represents a USD $200 billion annual origination opportunity for assets that could be brought onto its tokenised marketplace rails. It added that it is maintaining a medium-term EBITDA margin target of 60% following the transaction.

Michael Tannenbaum, Chief Executive Officer of Figure, described the acquisition as part of the company's broader strategy in blockchain-based capital markets.

"Figure is relentless in our pursuit of moving the capital markets onto blockchain rails, and nine months past our successful IPO, this Kiavi transaction is a further pole vault into tokenisation, first-lien diversification and our agentic AI platform," Tannenbaum said.

"Adding Kiavi's RTL and DSCR capabilities into our partner network will symbiotically supercharge their growth and the growth of our consumer loan marketplace," he added.

Executive changes

After the transaction closes, Arvind Mohan will join Figure's executive team as Chief Business Officer. Mohan currently serves as Chief Executive Officer of Kiavi.

Kiavi has spent more than a decade building a lending platform for property investors using data-driven underwriting and automated document review. Those systems will complement Figure's use of blockchain records and artificial intelligence tools in loan origination and distribution.

Mohan said the combination would mark a major step for the residential investor lending market.

"For the past 13 years, Kiavi has been focused on powering our data flywheel and proving what's possible when technology and industry expertise converge," Mohan said.

"This transaction represents a massive leap forward for the asset class. With Kiavi's industry-leading platform powered by Figure's innovative blockchain marketplace, we have the opportunity to deliver an entirely new - and unmatched - standard of reach, reliability, and execution," he added.

Sixth Street, which is partnering with Figure on the purchase of Kiavi's balance sheet assets, said the deal extends an existing relationship between the two groups.

"As long-standing partners of Figure, we are proud to continue working together as Kiavi joins the Figure platform," said Michael Dryden, Partner and Head of Asset-Based Finance at Sixth Street.

"We are pleased to be contributing our residential mortgage and private credit expertise to support Kiavi's growth as a leading originator," he added.

Mike Cagney, Co-Founder and Executive Chairman of Figure, said the company sees a need to bring larger pools of assets on-chain.

"Blockchain is a big idea, but the on-chain capital markets are in their infancy. Figure needs to make bold moves to bring entire asset classes on chain," Cagney said.