Following a disastrous Zoom
Better.com is a mortgage start-up based out of New York with plans to expand its insurance and loan products. The company announced in May of this year that it would be going public via a SPAC rather than an IPO by merging with blank-check company Aurora. The now-delayed deal valued Better.com at $7.7 billion.
Better.com's VP of communications, head of public relations, and head of marketing all submitted their resignations in the wake of Garg's Zoom call. Executives leaving a company prior to its public offering is virtually unheard of, and analysts wonder if Garg will be the next to go, possibly by force.
Clips of the call were soon spread across the internet and the company saw widespread condemnation. Since then, Garg has told reporters that "at least 250" of those workers were suspected of committing wage theft. Internet users condemned Garg, arguing that his show of remorse was insincere and that the reasons for the layoffs were insubstantial.
Before the SPAC deal was even announced, the company had already raised nearly $1 billion in investments from affirms including SoftBank
The $750 million was provided by Aurora and SoftBank as an amendment to the initial SPAC investment deal. Prior to this adjustment, $950 million of the total $1.78 billion in committed financing would have gone towards purchasing shares from stockholders. Instead, the $750 million will go directly onto the company's balance sheet.
"With this new structure the company will fortify our balance sheet and position us as extremely well capitalized in a tough mortgage market," Better.com CFO Kevin Ryan said in an email to employees. "Surviving is winning and capital ensures survival."
"By the end of this week we expect to have $1 billion of cash on the company's balance sheet...We will continue working through the process of public listing but the most important step has been taken (getting the money)," he continued.
Better.com states that the funds will be put towards progressing its existing business by continuing to create "a custom-first home purchase experience" and launching new products and services.
According to official sources with the companies, the pause in the SPAC process is meant to allow Better.com and Aurora to receive regulatory approval for its updated SPAC deal. However, analysts suspect the delay is more closely related to the mass layoffs and the backlash the company received as a result.
This isn't the first time that Garg has been in hot water over his comments made to employees. Last year, Forbes reported the contents of an email between the CEO and his workforce:
"HELLO - WAKE UP BETTER TEAM. You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and...DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME."
Garg has also been the subject of several lawsuits alleging "improper and even fraudulent activity", including the misappropriation of "tens of millions of dollars".
