What Better’s CEO swap means for its future

A leadership shakeup at Better this week underscores the company’s ongoing struggle to balance its mortgage origination business with its technology ambitions as it pursues profitability, a goal that now appears more distant than leadership previously projected.

Daniel Lewis, whose hedge fund Orange Capital shut down in 2016 after 10 years in operation and a portfolio worth more than $1 billion, is taking the helm at Better as interim CEO. Viewed as an activist investor, he gained the top job after building a 5.8% stake in Better. In February, Orange Capital Ventures disclosed 587,490 shares of Class A stock in the company.

“I have been a significant shareholder of Better for more than a year. Over the past year, I have become deeply engaged with the company as an independent adviser, resulting in my recent appointment to the board,” Lewis told HousingWire.

“During that time, I have worked closely with management on cost reductions, enterprise partnerships, strategic planning and operational initiatives, allowing me to develop a detailed understanding of Better’s technology, strategy, and operations. I undertook my independent advisory work as a concerned shareholder, not as a candidate for future leadership.”

Lewis is been closely watched by Vishal Garg, the Better founder who served as CEO for more than a decade and still retains significant influence over the company’s future. Garg controls Class B common stock that entitled him to about 19% of the voting power as of March. Under Better’s structure, his voting power can increase as holders of Class B stock (which carries three votes per share) sell and convert those shares into Class A stock (only one vote per share).  

“I remain Better’s founder, a board director, its single largest voting shareholder by a large margin, and am invested in its long-term success,” Garg said in an exclusive response to HousingWire.

Lewis added that Garg, as a board member, “will work closely with me to ensure an orderly and effective leadership transition, but does not have any day-to-day operational role.”

Mounting losses

Garg’s step back from the CEO position follows the unraveling of profitability promises.

In prior earnings reports, Better said it aimed to reach profitability by the end of the third quarter of 2026, after 11 consecutive quarters of losses. The company went public in 2023, after merging with special purpose acquisition company Aurora Acquisition Corp., and its stock has fallen more than 90% since then.

Better released preliminary Q2 206 earnings results this week, including funded loan volume ($1.67 billion, up 45% year over year), revenue ($54.7 million, up 28% year over year), net loss (-$30.6 million) and adjusted EBITDA (-$14.0 million, including a $6.5 million benefit from a TRID reserve release tied to loans originated before June 2022).

The company’s official release and earnings call are scheduled for Thursday.

BTIG analysts called the preliminary results “disappointing,” despite volumes and revenues coming in line with expectations. “With the combination of the weaker second-quarter results and higher rates, we expect a delay in the shift to EBITDA breakeven,” the analysts added in a report released Tuesday.

Lewis said that Better is working to meet the “objective of durable profitability that generates the resources to continue investing in Tinman, enterprise distribution, and the areas where Better is competitively differentiated.” But leadership is not “going to anchor the company to a specific month for becoming cash flow positive.”

SoftBank’s ongoing role

Better has made several announcements affecting its financials. The latest, now under Lewis, is an expanded cost-reduction plan targeting $45 million in annualized savings by the end of 2026, up from a previous goal of $25 million.

Lewis said cost reduction will be done across the organization, reflecting efficiency initiatives, including greater automation through Tinman and Betsy, streamlined operations and disciplined expense management.

In April 2025, SB Northstar, the asset management wing of SoftBank, agreed to restructure debt in a transaction involving a haircut and cash. The lender retired $530 million of debt due in 2028 that accrued interest at 1% annually. It also issued $155 million in new senior secured notes at a 6% annual rate due in December 2028. Better also made a one-time payment of $110 million.

Better granted the investor a nonvoting board observer seat, contingent on the investor continuing to hold at least 25% of the total note amount, or 12% of the outstanding shares of the company’s Class A, B or C stock, according to the agreement.

Regarding the role of Softbank in the current leadership transition, Lewis said Better does not comment on “specifics of arrangements with Softbank or other individual investors.” The company’s strategic direction is set by the management team and board, he added.

Better is not the first SoftBank-backed firm to undergo a leadership shakeup. Uber co-founder Travis Kalanick stepped down as CEO in 2017 following workplace culture and sexual harassment scandals, although SoftBank did not acquire its 15% stake until 2018. Kalanick left the board at the end of 2019.

At WeWork, where SoftBank was a primary financial backer, co-founder and CEO Adam Neumann resigned in 2019 amid a delayed initial public offering and governance concerns. Its valuation later collapsed and it filed for bankruptcy in 2023.

In another initiative, Better put U.K.-based Birmingham Bank — acquired in 2023 — up for sale. As of the first quarter of 2026, the bank is presented as discontinued operations, posting a $21 million loss from January through May, compared with a $49.3 million profit for the remainder of the business.

Overall, the lender’s liquidity declined from $229 million in cash, restricted cash, short-term investments and assets held for sale in Q4 2025 to $136 million in Q1 2026.

Simultaneously, Better announced plans to raise about $69 million in gross proceeds (before underwriting discounts, commissions and offering expenses) through a public offering of Class A common stock. Better said it intended to use the net proceeds for growth capital and general corporate purposes, and to terminate its at-the-market equity program.

Recharted business model

A mortgage industry expert who spoke with HousingWire on background said the leadership shakeup appears aimed at refocusing the company to reach profitability.  

“The P&L, from a revenue standpoint, is actually driven by the fact that they’re a mortgage originator — that’s what generates all their revenue and earnings,” the expert said. “But their costs are a mix of being an originator and employing engineers and people focused on building tech platforms and products.”

On the mortgage side, Better brought in the NEO Home Loans division after Minneapolis-based mortgage lender Luminate Home Loans chose to shut it down only two years after acquiring it from Celebrity Home Loans. Since January 2025, NEO has grown from a $1.5 billion run rate to $2.97 billion as of March 2026. 

Regarding the future of NEO, Lewis said the division “plays an important role in our core business,” and the company sees “meaningful opportunity ahead as we continue to scale efficiently and lower acquisition costs across our platform.”

Better also said it is sharpening its strategy around a platform model in which partners handle customer acquisition while Better focuses on efficient mortgage manufacturing and technology.

“Our partner-led platform strategy pushes us to lean further into partnerships with enterprise customers and independent mortgage brokers,” Lewis said. “With that said, DTC (direct to consumer) remains a core part of Better’s operations. Winning in DTC is no different than any other channel; if we have the lowest unit economics in the industry, we have a right to win, and Tinman is what gives us that advantage — in DTC and every other channel we serve.”

On the tech side, mortgage industry sources said the main challenge is that companies need scale to be successful in that business, meaning a large portfolio of clients is necessary.

Better has built a technology ecosystem centered on artificial intelligence and a digital lending infrastructure, partnering with companies like OpenAI and ElevenLabs to support its Tinman AI platform and AI loan agent, Betsy.

The company has also worked with Credit Karma, Finance of America and Coinbase on digital mortgage, home equity and crypto-backed lending initiatives.

“Don’t scream to me that they want to be a big mortgage originator. To me, Lewis as interim CEO screams like they want to build technology. And my question is, how many fintech mortgage companies or mortgage tech companies have really broken out and been successful. Not a lot,” a mortgage industry adviser said. 

“At the end of the day, this is a bottom-line business,” he added. “You can say all you want about building new technologies and creating cool stuff, but if it’s not driving toward profitability, investors aren’t going to be patient with that.”