Vishal Garg, the founder of Better Home & Finance, is seeking to reclaim his position as CEO after being ousted earlier this month, following his controversial mass layoffs during a Zoom call in 2021.
Vishal Garg, the founder and former CEO of Better Home & Finance, is making headlines once again as he attempts to regain control of the mortgage company he established. This move comes after he was removed from his position on August 3, shortly after Daniel Lewis joined Better’s board and took over as CEO.
Garg gained notoriety in December 2021 when he dismissed approximately 900 employees during a Zoom call, a decision that drew widespread criticism and led to a leave of absence. Now, he claims that the board made a mistake in ousting him and accuses Lewis of lacking transparency regarding his intentions while they worked together.
“He hoodwinked me,” Garg said, referring to Lewis. “He said he liked the company’s strategy. He praised us on X and used that to get on our board and win our confidences.”
Garg’s departure comes at a challenging time for Better, which has seen a significant decline since the pandemic-era mortgage boom. The company was once valued at around $8 billion when mortgage rates fell below 3%, leading to a surge in refinancing demand. However, as rates increased, the refinancing business collapsed, resulting in a dramatic downturn for Better.
The company’s annual sales plummeted from $1.5 billion in 2021 to just $70 million in 2023. Garg contends that under his leadership, Better was beginning to recover, with revenue projected to reach approximately $200 million this year. He attributes this turnaround in part to the company’s use of artificial intelligence to expedite mortgage processing, claiming that the technology can perform tasks that would typically require numerous employees over several days.
Additionally, Better has partnered with Neo Home Loans, which Garg asserts has helped double productivity while reducing loan origination costs by 50%. The company has also formed alliances with notable firms such as Intuit, Coinbase, and OpenAI this year to enhance its mortgage-related services and expand its home equity line of credit business.
Despite Garg’s claims of a comeback, his tenure has been marred by controversies. The 2021 layoffs sparked significant backlash, and Better faced a whistleblower lawsuit that was later dropped, as well as an investigation by the Securities and Exchange Commission that did not result in any action against the company. Following its 2023 SPAC merger, Better’s stock price experienced a steep decline, and the company continued to report losses.
Garg has acknowledged that his management style has been challenging and that the mass layoffs severely impacted his reputation. However, he now believes that the criticism has been redirected towards him unfairly.
According to Garg, Lewis approached him about six months ago with suggestions for cost-cutting and improving profitability. While he found some of Lewis’ ideas beneficial, he disagreed with his approach to innovation. “(Lewis’) thoughts about cost savings were good. His ideas about innovation were not,” Garg stated. “It’s so much easier when we’re this close for someone to come in and say that they could have done better.”
Lewis joined Better’s board on July 27, and within a week, he had replaced Garg as CEO. Following his appointment, Lewis took to X to express his respect for Garg, stating, “There was never a $BETR without @vishal_better. That demands respect.”
Initially, Garg accepted the decision to step aside, emphasizing that his focus has always been on building the company rather than clinging to the title of CEO. “It’s not about me,” he remarked. “I care about delivering savings to people and helping them live the American Dream. So when shareholders said, ‘You need to take a back seat,’ I complied.”
However, Garg is now seeking to reverse that decision. He claims that investors have reached out to him following his removal, urging him to return to the company. Garg asserts that he possesses enough Class B shares with special voting rights, including shares held by early investors who support him, to regain control.
To bolster his case, Garg has enlisted the services of high-profile attorney Alex Spiro from Quinn Emanuel and has sent a letter to Better’s board demanding his reinstatement. He has even offered to work for $1 a year until the company becomes profitable, after which he would transition out of the CEO role.
The company’s stock performance since Garg’s removal has also become a focal point in his argument. Shares have dropped 45% since Lewis took over, and the stock was already down more than 16% this year prior to Garg’s departure announcement.
For Garg, this latest battle is less about reclaiming a title and more about demonstrating that the company was on the path to recovery. “It’s an acknowledgment that I’ve been doing this for 10 years, but execution hasn’t been perfect,” he said, as reported by CNN. “I hope it gets resolved. I think the future still remains very bright for Better.”
As the situation unfolds, the outcome of Garg’s efforts to reclaim his position remains to be seen, but it underscores the ongoing challenges facing Better Home & Finance in a rapidly changing mortgage landscape.
According to The American Bazaar.