Austin-based Setpoint has acquired Resolute Diligence Solutions, which provides asset-level reviews for real estate loans.
Setpoint, founded in 2021, is a fintech and proptech startup that raised a $43 million Series A round in December 2022. Setpoint’s capital and technology platform enables real-estate, auto, consumer, and other asset-backed borrowers to offer credit options to consumers
Ben Rubenstein, Setpoint’s President and Co-Founder, said that its acquisition of Resolute strengthens Setpoint’s technology platform for asset-backed lending. The companies did not disclose the financial terms of the deal.
“They were a competitor to us,” Rubenstein said. “They are the largest in both what’s called SFR single family rental, so those are companies who are buying lots of real estate and renting them out or RTL residential transition loans, also known as fix and flip companies who are buying real estate, fixing it up, and then quickly selling it after it’s been fixed.”
“They have lots and lots of customers, but they only have one specific product, and we have a phenomenal product that has a lot of pieces but not as many long-term customers as they do, so coming together, it’s going to be great for their customers to have more products and it’s going to be great for us to have this huge customer base,” Rubenstein said.
In addition to asset verification, Setpoint’s software and platform also manage portfolios with real-time monitoring forecasting and optimization, collateral management to track data, documents, lender requirements, operational workflows, and valuations management to automate and streamline BPO, appraisal, and AVM fulfillment.
“It’s tough to track the whole portfolio of what’s changing, and so they use our software to track the entire process and their entire borrowing base because it’s constantly changing and to make sure that they’re in compliance with their facilities and that they’re being kind of optimal with their capital,” Rubenstein said.
Rubenstein said that Resolute Diligence is a third-party due diligence company that builds trust in lending transactions. Resolute Diligence Solutions evaluates and verifies each deed, title, or lease is verified and reported accurately against financial statements.
“Resolute is highly complementary to the Setpoint platform and, when combined, is far and away the best-in-class solution for capital markets borrowers and lenders. A clear example of 1 + 1 = 4,” Setpoint Co-Founder and CIO Michael Lam said in a news release.
Brent Taggart and Richard Lundbeck founded Resolute Diligence Solutions in Park City, Utah, in 2019. It offers transportation financing, home rental, and loan services and is known for its customer service, which will continue to be the mainstay of the combined Stepoint and Resolute offerings.
From buying a home to using a credit card, billions move daily between warehouse lenders and companies that originate loans. These transactions are powered by email, Excel, paper documents, and software developed in the 1980s. Unfortunately, errors and friction drive up the cost of lending or borrowing. As a result, consumers and businesses need equal access to trust and credit. Setpoint and Resolute restore it, Rubenstein said.
Setpoint’s customers include Homeward, Orchard, Ribbon, and Single-Family Rental companies like Amherst.
“All these companies are borrowing capital to do asset back lending and have complex facilities, and we help automate that entire process,” Rubenstein said.
In December, when it closed its xxx round of funding, Rubenstein said the company plans to branch outside of real estate into auto loans and credit cards, and it has since done that.
“They’re very similar,” Rubenstein said. “At a high level, you have a large bank whose lending capital is based on assets where those assets are homes or autos, or you know credit card receivables whether they need to know that those assets are real and have someone verify them.”
“I think one issue with credit is all about trust, and if we are making trust easier by being the third-party diligence agent, that means the credit can be cheaper and be more accessible to more people,” Rubenstein said.
Setpoint has 30 employees between offices in Austin and New York and plans to keep all of Resolute’s 20 employees and its office in Utah. Both companies also have employees who work remotely.
“This is going to lead to much more hiring,” Rubenstein said.
“I think this is a shining light,” Rubenstein said. “We have been growing steadily throughout this current recession.”
Editor’s note: This story incorrectly reported Ben Rubenstein’s title. He is the company’s president. Stuart Wall is CEO.