Sixth Street invests $200M in blockchain lender Figure

Global investment firm Sixth Street has invested $200 million in Figure Technology Solutions, a U.S.-based lender utilising blockchain technology to enhance efficiency and reduce costs in the lending market.

According to The Wall Street Journal, this investment will enable Figure to issue up to $2 billion in new loans and expand into other lending markets.

The funding will strengthen Figure Connect, the platform’s private credit lending division, by enhancing its loan origination capabilities.

Figure Technology primarily issues home improvement loans, but also offers business loans and debt consolidation services.

It also provides personal lending services that allow cryptocurrency investors to take out collateralised loans.

Figure reports serving over 100,000 households across 47 U.S. states.

The investment is structured as a joint venture, with Sixth Street's Asset Based Finance platform committing $200 million of equity.

This commitment can be recycled and used for future Figure production, driving additional liquidity for Figure private credit loans.

Through its partnership with Sixth Street, Figure will tap into additional liquidity and gain access to an “always-on” programmatic bid for its assets.

Todd Stevens, Chief Capital Officer of Figure, stated that the joint venture "validates Figure Connect as the largest, most liquid, blockchain-based capital market."

Michael Dryden, Partner and Head of Asset Based Finance at Sixth Street, said they are "thrilled to bring our deep experience in residential mortgage investing to form this joint venture with Figure."

Figure Connect, launched in June 2024, is Figure's marketplace for private credit loans, designed to facilitate scaling for loan origination partners.

It offers advantages like attractive warehouse lines for managing cash flow, hedging to manage market risk, and infrastructure that automates loan sales and deliveries on a transparent blockchain.

Partners can also use the marketplace for price discovery by putting out pools of loans for bidding.

Over 40% of Figure's December 2024 volume went through Figure Connect.

The investment expands Sixth Street’s presence in the fintech industry.

In December, the firm backed consumer lending company Affirm in a $4 billion deal.

Venture capital investments in the blockchain and cryptocurrency sector are expected to reach $18 billion this year, up from $13.6 billion in 2024.