Figure Technology Solutions Inc. (NASDAQ:FIGR) announced on Wednesday that it has entered into a definitive agreement to acquire Kiavi for $717 million. Under the terms of the transaction, a joint venture formed by Figure and global investment firm Sixth Street will acquire Kiavi’s balance sheet assets.
Kiavi operates an AI-enabled lending platform that supplies capital to residential real estate investors for property purchases, renovations, and rental operations. The company’s product suite includes short-term Residential Transition Loans and longer-term rental financing structured as Debt Service Coverage Ratio loans.
Figure said the acquisition will materially expand volume across its marketplaces. Management expects the transaction to add more than $7 billion in annual first-lien volume to Figure Connect, its marketplace for originating assets, and to contribute in excess of $100 million per month to Democratized Prime, the company’s blockchain-native warehouse marketplace.
The company framed the opportunity as a sizeable addressable market, saying the combined business represents a $200 billion annual origination opportunity that will be migrated onto Figure’s tokenized rails. Figure also highlighted its existing market position, noting that it currently accounts for 75% of real-world asset tokenization.
Operationally, Figure said the larger scale and combined operational capabilities support a medium-term EBITDA margin target of 60%. The firm also projected that the acquisition would be accretive to earnings per share and deliver an unlevered cash payback in less than four years.
Kiavi’s asset class will be the inaugural use case for Adaptor, Figure’s newest AI product designed to enable agent-to-agent onboarding across all asset types within Figure Connect and Democratized Prime.
"Figure is relentless in our pursuit of moving the capital markets onto blockchain rails, and nine months past our successful IPO, this Kiavi transaction is a further pole vault into tokenization, first-lien diversification and our agentic AI platform," said Michael Tannenbaum, Figure Chief Executive Officer.
Following deal close, Arvind Mohan, Kiavi’s chief executive officer, is slated to join Figure’s executive team as Chief Business Officer. Kiavi reported more than $250 million in revenue and over $100 million in EBITDA in the last year.
Advisors on the transaction were disclosed by the parties. Barclays Capital Inc. served as exclusive financial advisor to Figure and Sixth Street, while Jefferies LLC acted as exclusive financial advisor to Kiavi.
Summary
This transaction will bring Kiavi’s lending business and balance sheet assets under a structure led by Figure and Sixth Street, increasing Figure’s originations on its Connect marketplace and inflows to its Democratized Prime warehouse, while positioning Kiavi’s asset class as the first application for Figure’s new Adaptor AI product.
Key points
- Figure will acquire Kiavi for $717 million, with Kiavi’s balance sheet assets purchased by a Figure-Sixth Street joint venture.
- The deal is expected to add more than $7 billion in annual first-lien volume to Figure Connect and to add over $100 million per month to Democratized Prime.
- Figure projects the combined businesses support a 60% medium-term EBITDA margin target and expect accretion to EPS with an unlevered cash payback in less than four years.
Sectors impacted
- Fintech and blockchain-enabled capital markets.
- Residential real estate lending and mortgage finance.
- Asset tokenization and institutional warehouse lending.
Risks and uncertainties
- Projections and targets - The company has stated expectations for EPS accretion and an unlevered cash payback in less than four years; those financial outcomes are projections and their realization is not guaranteed.
- Execution against margin targets - Figure cites a 60% medium-term EBITDA margin target supported by combined operational strengths; meeting that target depends on successful integration and scale delivery.
- New product adoption - Adaptor will be deployed as the first AI-enabled onboarding tool for Kiavi’s asset class; uptake and operational performance of a new product present execution risk.