Figure Completes $717 Million Acquisition of Kiavi

Figure Technology Solutions has completed the acquisition of AI real estate loan platform Kiavi, with a total transaction value of $717 million, integrating Kiavi's residential investor loan technology and operational system into Figure's blockchain-native credit market, Figure Connect.

The transaction is divided into two parts: Figure acquires Kiavi's technology, operational platform, and some other assets; a joint venture with global investment firm Sixth Street purchases loans on Kiavi's balance sheet. This structure allows Figure to gain loan origination and operational capabilities, while some credit risk and capital tied up in already issued loans are assumed by the joint venture.

Kiavi primarily offers residential bridge loans and debt service coverage ratio (DSCR) loans. Residential bridge loans mainly serve real estate investors who purchase, renovate, and resell homes; DSCR loans are underwritten based on the rental cash flow generated by investment properties rather than solely relying on the borrower's salary income.

Figure expects Kiavi to add over $7 billion in annual priority lien loan origination volume to Figure Connect and bring in over $100 million in monthly capital flow to the Democratized Prime on-chain lending market. This expectation aligns with the company's goal for the scale of the integrated platform, depending on partner integration, loan demand, credit performance, investor capital supply, and actual adoption of asset tokenization.

The Kiavi brand, platform, and technology will connect with over 480 active ecosystem partners of Figure. Kiavi CEO Arvind Mohan will join Figure as Chief Business Officer, responsible for driving the implementation and commercialization of the Kiavi platform within the Figure ecosystem.

Figure will pay approximately $590 million in cash, primarily funded by its $600 million senior notes issued in July, with an 8.5% coupon rate maturing in 2031. The $717 million transaction valuation does not contradict the approximately $590 million cash expenditure, as the difference involves acquired assets, loan disposal arrangements, transaction structure, and other consideration adjustments; however, the 8.5% fixed coupon will increase Figure's annual interest burden in the future.

This acquisition expands Figure's credit structure from primarily secondary lien home equity loans to include priority lien residential investment loans and DSCR products. Priority liens typically have a higher repayment priority than secondary liens in the event of borrower default, but real estate investment loans still heavily depend on property prices, rental income, refinancing conditions, renovation costs, property liquidity, and the borrower's project execution capability.

In market mechanics, real estate investors and property operators are the buyers of loan funds, while Figure Connect partners, institutional capital, the Sixth Street joint venture platform, and on-chain lending participants are the suppliers of funds. After Kiavi originates loans, Figure can finance, sell, trade, or tokenize the loans through the blockchain-native market, with funds flowing from traditional bank on-balance-sheet loans and private credit to distributable priority lien and DSCR assets; Figure and its partner network benefit from transaction, financing, and asset turnover scale, while borrowers bear interest rate and refinancing risks, and capital providers assume real estate credit loss and liquidity risks.

Source: Public Information