The Rundown - Deep Dive: Can the Figure IPO Live Up to the Hype?

Episode Date: September 13, 2025

Figure is making a huge promise: to reinvent Wall Street by building the future of capital markets on the blockchain. They think by cutting out the army of middlemen in the financial system, they can make everything from home loans to complex trading faster, cheaper, and more transparent. In today’s deep dive we tell you more about Figure’s business, how they make money, and explore whether they can actually onboard capital markets into their ecosystem or if they’re just a boring lender disguised as a crypto company.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about Figure Technologies, the blockchain tech company that just went public this past week. Figure is making some huge promises. They want to reinvent Wall Street by building the future of capital markets on the blockchain. They think by cutting out the army of middlemen in the financial system, they can make everything from home loans to complex trading faster, cheaper, and more transparent. And Wall Street seems to be buying into the business.

story, at least for now. Figure stock popped 24% on its first day of trading. So in today's deep dive, we're going to tell you more about figures business, how they make money, and if they can actually reinvent Wall Street with blockchain technology, or if they're just a boring mortgage lender underneath all that blockchain makeup. We got a great one for you today. Let's dive in. What does figure actually do today? Well, if you look past all the grand vision to reinvent Wall Street right now, figure is mostly a lending company. The bulk of their business is lending money to consumers, specifically Heelock loans. Helock stands for home equity lines of credit.

It's something that homeowners can tap if they want to borrow money against their home. Imagine if you own a house and it's gone up in value. Well, the homeowner can borrow money against the increased equity without having to sell the house. And these kind of loans have become Figures bread and butter. In fact, Heelocks make up 99% of their loan. loan business and they've become a major player in the space. Now, typically home equity loans are dominated by traditional banks like Bank of America, PNC and JPMorgan, but Figer has become a serious player as a non-bank.

If you look at the top 20 bank lenders for Heloc, Figer would rank number six when it comes to volume. So how did a blockchain company take so much market share from giant banks? Well, it comes down to their competitive advantage, which is speed and costs. Figure says that its platform is faster and cheaper than industry standards. thanks to its blockchain technology. Figer built a custom loan origination system which leverages the Providence blockchain.

It's an independent Layer 1 blockchain that records all the loans and all the asset data that occurred through Figer. Figer also has an automatic evaluation model opposed to a traditional appraisal process. So you add all that up and Figer can fund a home equity loan in a median time of just 10 days.

Compare that to the industry medium, which is 42 days. But to me, the cost savings are even more, insane. Figure says their average cost to produce a loan is about $730, whereas the industry average is over $11,000. The company says by automating things like appraisal and recording everything on the blockchain, they've stripped out a huge amount of time in manual labor. So figure has carved out a nice, meaningful slice of the Helock market, but how big is that market exactly, and will it keep growing? The Helock market has exploded over the last few years.

thanks to rising home values and elevated interest rates. According to the Federal Reserve, the U.S. has about $35 trillion in outstanding home equity as of the end of Q1 of this year. At the same time, millions of homeowners are locked into these 2 to 3% mortgage rates that they got back in 2021. These low-interest mortgages have become a golden handcuff for homeowners

where nobody wants to sell or refinance their home and give up that amazing rate. So that's why a ton of homeowners are turning to HELOCs in order to get cash. It's the perfect way to tap that home equity without touching the primary mortgage. This perfect environment has created a massive tailwind for Figure and the overall HELOC lending market. But it's important to note that macroeconomic conditions are about to change. See, right now, Figure's business model depends on high interest rates and high home valuations. Both of those could be changing soon. The Federal Reserve is going to cut interest rates at the

September meeting, with more rate cuts expected this fall. That's going to lead to mortgage rates coming down. Mortgage rates fall far enough, well, homeowners might decide to do a cash-out refinance instead of taking out a second loan through a HELOC. So falling interest rates is a risk to Figuers business, but then you also have the housing market itself. If home values start to fall, the amount of tapable equity shrinks. What's worse is that falling home prices increase the risk of defaults, which would be a disaster for any lender.

So while things are hot right now in the HELOC market and Figer has been able to capitalize on that, they need to diversify their business model outside of Helogs to have a long-term business. And that's exactly what they've been doing. So let's talk about it. So we've talked through how Figure has captured a big chunk of the Heloc market using blockchain technology. So now let's talk about how much money they're making from it. In the first six months of this year, figure generated $191 million, which is up 22% from the same period last year. On top of that, they reported a profit of $29 million in the first six months compared to $1,000,000, compared to $1,9 million, a loss of 13 million in the same period last year. So the company is profitable, which is nice to see.

But now let's dig into how they actually make money. Figuers business is split into two buckets. The first bucket is their figure branded loans. This is their direct-to-consumer business. If you go on Figuers website right now and apply for a HELOC and they originate that loan, that's their figure-branded loan. Figer makes money from upfront fees, the interest they collect, and most importantly, from selling that loan to big institutional investors. down the line. This direct-to-consumer he-locked business is a core part of their revenue, making up 82% of their net revenue in 2024. Now, that is down to 76% in the first half of 2025 because other parts of their business is starting to pick up. And that brings me to the second bucket of their

business, which is a lot more exciting for investors. It has to do with the volume they get from their partner brands. See, Figures blockchain technology is so good that other banks and credit unions use it for mortgage lending. These partner banks pay figurations. These partner banks pay figure a fee to use their blockchain technology that allows them to offer low-cost helix and speed up the whole lending process. And then the key here is the figure-connect marketplace, which ties all of this together. All the loans generated using Figures blockchain technology can be bought and sold on the Figure-Connect marketplace. This marketplace allows Figure and their partner banks to instantly sell their HELOC loans to institutional investors and free up capital. Figure for their part

collects a fee when a loan is bought and sold. Essentially, Figure has created the eBay for buying and selling HELOC loans for institutional investors. And it's this business model that Figure is selling to Wall Street as the future. They're showing that they aren't just a lending company, but instead a fintech infrastructure and marketplace company. Those are the kind of businesses that investors get really excited about. Figure Connect is relatively new. It launched about a year ago in June of 24, and in its first year of operation, Figure Connect processed $1.3 billion in loan volume, which already accounts for 39% of Figures total consumer loan volume. And Figure plans to expand the Figure Connect marketplace to more than just HELOC loans. Figure wants auto loans and student

loans and all kinds of loans traded on their marketplace. The opportunity here is huge. Right now, there are about $2 trillion of annual originations across consumer asset classes, and if Figer can just take 4% of that market, that would be $80 billion a year. But Figer isn't just stopping there. They have plans to do even more. Let's talk about their vision to go beyond just home equity loans. The company wants to bring the efficiencies of blockchain technology that they brought to the HILOC market to every other part of finance. They want to reinvent how financial assets are originated, traded, and financed, and they're already cooking up some stuff.

First, there is the figure exchange. a digital asset marketplace that's built for trading everything from crypto to stocks to bonds and more. And what makes this exchange unique is it allows cross-asset collateralization. That means you can use one asset like stocks as collateral to trade another like Bitcoin, which opens up more flexibility for margin lending. Now again, this is mostly targeted to pro traders. Another thing that they're working on is yield-bearing stable coins or YLDS. It's a peer-to-peer interest-bearing stable coin that's both blockchain,

native and SEC registered as a security. And because it's treated like a security, YLDS could be used in all kinds of ways. It can be used for cross-border payments or even as default currency inside the figure exchange. And finally, they're also dipping their toes into crypto lending. Back in May, figure announced what was called the industry's first securitized pool of crypto-backed loans done in partnership with Victory Park Central. Users can borrow money in U.S. dollars against their ETH and Bitcoin holdings with a loan to value ratio of 75%. Essentially, it's a way for crypto holders to unlock liquidity from their

crypto assets without having to sell it. Now, all that being said, all these products that I just mentioned are very early. In fact, in the first half of 2025, Figure Exchange generated no revenue, and YLDS brought in less than $1,000. So it's an insignificant part of Figures business right now. Their main business continues to be HELOC loans, but they're trying to show investors that their vision for the company is much bigger. So what's the takeaway here? Well, on one hand, you could make the case that figure is just a normal heloc lender wearing blockchain lipstick.

The majority of the revenue depends on heloc loans, and that market is incredibly vulnerable to macro shifts like falling home prices or interest rates going down. But then again, the company is in the early stages, and they've shown that the blockchain tech is having a meaningful impact in an area that was once just dominated by big banks. They've been able to significantly speed up helock loans and do them as such a lot. low prices compared to the industry average. And it's possible that figure can bring the same level of efficiency using their blockchain technology to other parts of the financial industry. So the upside here is that figure could eventually be the AWS of financial infrastructure. I don't know if they'll

ever reach their goal of putting the entire financial system on the blockchain, but if they're even able to pull off just being a marketplace for loans, that could be a very lucrative business. You know, it also helps that figure went public at a time when the vibes around crypto are good, thanks to a crypto-friendly Trump administration and some recent crypto legislature. So they'll have some time to figure things out, but we'll have to see if they're able to execute on that vision before investors start seeing past all that blockchain makeup. Well, all right, guys, that's it for today's weekend, deep dive. Hope you guys enjoyed that one.

If you did and you have like seven extra seconds, don't forget to hit us with a five-star rating on Spotify, Apple, or wherever you listen to your podcast. And let me know in the comments on Spotify or YouTube if you think that figure can actually reinvent Wall Street or if it's just another overhyped FinTech slash crypto IPO. Thank you guys so much for spending a part of your weekend with us. Shout out to Mike and Connor

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