Startups Tellus, backed by a16z, wants to help people use...

Tellus, backed by a16z, wants to help people use their savings to become real estate investors •


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Crypto is not having a good week as Bitcoin crashed below $17,000 – its lowest level in two years. the fair keeps posting rejections as layoffs galore. Meanwhile inflation recently hit its highest point in 40 years.

For those looking for a safe place to park their money and actually earn a decent amount of interest on their savings above the national average APY of only 0.20%the options aren’t exactly plentiful.

Enter Tell us. The six-year-old fintech startup claims it can offer people returns of 3.85% 4.5% on their savings by using the money to fund certain US single-family home loans.

With mortgage rates more than doubling from a year ago, you might think this isn’t the best time to be a digital mortgage lender.

But co-founder Rocky Lee believes his company’s unique business model sets it apart from other such lenders in the space.

First, the company has a very niche offering. It is aimed at existing homeowners who want to upgrade to larger homes without selling the homes they live in, making it difficult for them to get approved for loans from traditional mortgage lenders.

If it sounds complicated, it is.

Lee sums it up like this: “The home they [Tellus’ borrowers] Buying is usually not the starter home. What they are looking for is called a super jumbo loan, which is designed for people who don’t actually have a ready-made mortgage solution. And we offer that solution for those categories of people.”

So where does the savings part come in?

Tellus interest rates are typically two basis points higher than the standard conforming mortgage. For example, in today’s market, if the interest rate on a loan is 7%, Tellus will charge 9% — a premium because it claims it is offering to lend money to U.S. borrowers for single-family homes “in prime cities” that would otherwise not be in the market. would be able to get such loans. Because it uses the savings deposits of its retail customers to fund these loans with yields ranging from 3.85% to 4.5%, Tellus makes its money by spreading what it pays out in interest versus what it charges its borrowers.

Her retail clients can earn interest on a daily basis, while getting help with things like budgeting funds and setting financial goals. Tellus says it promotes financial literacy by, for example, questioning users about financial terms and then rewarding them with higher interest rates. At the same time, the company lauds that it allows these consumers to invest in real estate in a way they wouldn’t otherwise have been able to, while having the option to withdraw their money at any time.

While the strategy may sound risky, Lee told that Tellus uses “very strict acceptance criteria” and has yet to see any defaults as the majority of its borrowers refinance their loans on more favorable terms shortly after.

Since its inception in 2016, Tellus has lent more than $80 million with an average loan of $2 million. It works with mortgage brokers to find borrowers. And it finds its retail customers through channels like Instagram, TikTok, and Google. Because the company is mobile-first, it targets people who use a smartphone. Tellus allows anyone in the US to use its savings software. It only borrows in California because it has a borrowing license and partnerships there.

Despite a challenging real estate market, the company says it grew its revenue by 55% in the third quarter compared to the second quarter of 2022, according to co-founder T Zhu. And earlier this year, it raised $16 million in a starting round of funding led by Andreessen Horowitz (a16z) and with the participation of All-Stars Investments, Alumni Ventures, Decent Capital, Vectr Ventures, West Arrow and Westwood Ventures. YouTube co-founders Lime and Sereno Group Real Estate also participated in the funding, which followed a $10 million SAFE.

The remote-first, Cupertino, California-based startup is emerging from stealth as it looks to grow its engineering, marketing and product teams, adding to its 50 workforce. It also plans to build on its recently launched new offer aimed at SMEs.

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.


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