Editor’s note: This interview has been edited for length and clarity.
Sarah Wolak: Michael, can you talk about what the collaboration between Figure and Bed Bath & Beyond looks like?
Michael Tannenbaum: I think a general approach that’s worth talking about is why this alliance broadly exists, right? When you think of Bed Bath & Beyond, you don’t necessarily think of a mortgage or home equity. And I think that’s actually a big testament to Figure and the way we’ve brought this concept of embedded mortgage and this broader idea of embedded finance.
I think Buy Now, Pay Later is a good example of embedded finance, where you have finance companies that specialize in what they do, and they sort of embed themselves into a retailer.
The interesting thing about Figure is that we use some of the same approach. We work with more than 250 brands and companies, most of which are on a private label basis. But we are also at the checkout of our partners and offer this white-label, very simple, fast and cheap mortgage. And that makes a lot of sense in certain retail applications.
The figure is really unique because normally when you think about a mortgage it’s so difficult to do it and it takes so long that it wouldn’t make sense to take out a mortgage anywhere in a retail stream. After all, it would totally slow down and retailers are hyper-focused on conversion. We’re really unique in that we could actually embed ourselves into a retail organization or cash register, and that would make sense because of how fast and easy we are.
Of course, that has to be a product with a higher value, because you’re not going to take out the equity in your house to buy a cup of coffee, are you? And you probably wouldn’t buy now and pay later either. So I think that whole background is important. When you think about “I’m Bed Bath & Beyond and Tokens.com, and I’m thinking about who I’m going to work with,” Figure is a very unique choice [because] it’s not like there were four other companies in the mortgage industry that would have been options because what we do is so differentiated. That’s kind of a framework when you look at this transaction and what it says for the future of the financial industry, embedded finance and, frankly, retail.
Point two is just the idea that Marcus Lemonis and his approach in general has been more blockchain forward. … He has this vision for a future where people view their assets as potentially tokenizable and therefore tradable, and also as collateral for loans.
And so we fit in from that standpoint as well, because we are a company that has been at the forefront of blockchain since we started in 2018. So not only are we an embedded mortgage that would make sense from a retail perspective, but also for someone looking for a blockchain product, we will be the only mortgage option.
SW: That makes sense. I think a lot of our audience has associated Bed Bath & Beyond with being in the news lately for closing their stores. Was there any hesitation in your mind when you were thinking about working with them since that’s such a different avenue than what they’re doing with Tokens.com?
MT: Our approach is that Marcus Lemonis, who has a history with many different media properties and retail, is behind it Good Sama major RV marketplace, has a strong reputation for being involved not only in building brands but also in the blockchain part. And so we are philosophically aligned.
For us, it’s a little less about what Bed Bath & Beyond once was and more about where they’re going. And I think there’s a history of retail brands in particular being revived after bankruptcy.
And I think the point is that sometimes there’s management of the company and also structural headwinds in retail, and then there’s where we’re going and Marcus and what he brings. If you zoom out, if you look at the $35 trillion in outstanding home equity, which is the broader opportunity, is there going to be a place online where people want to access that equity and leverage it across a portfolio of brands? They may put it on a card and allow themselves to spend money on their home equity, on their cryptocurrency, and that’s a long way in the right direction.
And to your point, at Figure, because we are embedded, we have our own approval process and credit guidelines. We obviously want to be associated with great brands, but there is nothing about this partnership that lowers our standard or approach than we would for any other partnership.
SW: Speaking of embedded, can you share any information on how deeply integrated Figure’s technology will be within the Tokens.com platform? Will it be a white label offering or something else?
MT: It’s a little early to say too much. But I think Marcus has been clear about one thing: and this is really his vision, and we are one of the people participating in this vision, right? – is the role that Figure often plays in our mortgage partnerships: we work with a number of brands and they decide how our product is presented to the customer.
So here I do know [Marcus] is a fan of our stablecoin returns and wants to make sure it has some branding as part of the partnership. So I think this gives you a rough idea of what this could be like. I think the Figure brand will be relevant in the experience, but it will focus on Bed Bath & Beyond and Tokens.com
SW: Do you know yet what loan products will be available at launch in terms of Figure’s involvement, and will Figure release them directly or under a different name?
MT: I can’t say that today without revealing some of the launch information in advance, but I can say that our really fast and efficient process is flexible for multiple use cases.
I think Bed Bath & Beyond and Tokens.com are examples of where we meet people where they are. I think it’s interesting to also juxtapose that with our partnerships with more traditional mortgage companies. For example, with our products like DSCR (debt-service-coverage ratio loans), we have this integration with our partners, and they have access to home equity, but they now also get DSCR. So again, it’s about meeting the customer where he or she is.
That will also be the case with Bed Bath & Beyond. For them, I think one of the things they’ll focus on more than DSCR – although there is some focus – will probably be on crypto-backed lending, because they think a lot of the customers who have crypto might want to lend for that.
But DSCR, these are loans that are largely intended for real estate investors. And a lot of people actually use the equity in their homes to buy real estate for investors, and a lot of people probably go to a place like Bed Bath & Beyond to improve that real estate for investors. So if we go back to this concept of embedded finance and embedded mortgages, you get all these things from Figure.
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