For those of us who operate in the private real estate lending space, Kiavi is a household name. The company is, by far, the largest lender in the nation. In 2025, Kiavi originated $7.8 billion in loans to house flippers, landlords, and builders. On that $7.8 billion, the company earned about $250 million in revenue from fees. That’s roughly 3.2%, top line, on every dollar it lent. Out of that, more than $100 million fell to adjusted EBITDA, a 40 percent margin.
A 40 percent margin in a lending business of that scale is impressive. It’s a sign of a company that solved one of the hardest problems in lending, which is distribution or acquiring new business. Making loans is not difficult. The hard problem is making loans that get paid back, cheaply, to people who come back and borrow again.
Kiavi cracked the code. Its borrowers returned 75% of the time. That single fact is impressive, because the most expensive thing a lender does is find a new customer. For context, we estimate the industry average repeat borrower rate is closer to 35%, based on proprietary data we track at Baseline. When the same borrowers keep coming back deal after deal, your acquisition cost collapses. Kiavi’s worked out to something close to 7x. For every dollar it spent acquiring a new borrower, it earned roughly seven dollars back in fees over that borrower’s life.
So when Figure announced that it was buying Kiavi for $717 million, it naturally caught the attention of everyone in the industry. I spent the last 24 hours trying to understand who won and how this will impact the industry.
Who actually won here?
Start with Kiavi itself. This was a category leader. The cheapest capital in the industry. One of the most advanced technology platforms anyone in private lending had ever built. It was profitable, growing 30 percent a year, taking market share while transaction volume as a whole shrank.
Over its life as LendingHome and then Kiavi, the company is estimated to have raised on the order of $240 million in venture equity, according to Crunchbase. It was funded by VC firms in Silicon Valley who invest in companies with the expectation of an outsized return that can range anywhere from 10 to over 100 times their investment. Kiavi is one of the handful of lending companies in the space that had this type of funding to support its growth. I’m left wondering whether this was the outcome the VCs or the people who built this thing expected.
Next there is the question of what Figure was really buying? Presumably distribution and marketshare, which benefits Figure. How the acquisition changes Kiavi is unclear to me. Kiavi already had the cheapest capital and the best technology. It is not obvious how being owned by Figure makes the Kiavi brand originate meaningfully more loans that it already would have. According to the announcement, Figure estimates a greater than $200 billion dollar origination market opportunity ($116B RTL or fix and flip, $58B DSCR, and $49B Ground Up Construction). Figure figured (no pun intended) that the fastest way to become the biggest lender is not to out-build the best lender but to write a check for it.
What this means for private lenders
At Baseline, we work with private lenders up and down the size spectrum. Shops doing a few million a year and shops originating several billion. The striking thing is how few of them actually compete with Kiavi on price. A handful do. Most don’t even try. They’ve found other levers. Some win on speed or funding loans nobody else will touch in time. Others own a region so completely that the local flippers wouldn’t think of calling anyone else. They underwrite the esoteric project that the algorithms will automatically reject. They are differentiated, and they are thriving, and not one of them is losing sleep over fees or rates.
Tokenization, Figure’s bread and butter, will inevitably drive more efficiency in a lender’s capital stack. But the cost of capital is one way to win. It was a large part of what made Kiavi successful. It is not the only way, and the lenders who understand that are the ones growing despite pressure from Kiavi.
What this means for the industry
Overall, I think this is good news for the industry. It forces everyone else to get better and innovate. It’s hard to be complacent when the best operator in your category gets acquired by a company with access to even cheaper capital and a strong balance sheet. It drags a famously clubby, relationship-driven, sometimes amateur business toward institutionalization and professionalization.
I’m also genuinely excited about the technology aspect of this deal. For all the blockchain hype that came and went, the actual problem tokenization solves is real and I think over time it will benefit everyone. Put loans on-chain and you get collateral you can verify, fraud you can catch, and an asset that lenders can’t pledge twice. This corner of the market has been opaque for its entire existence. More transparency and less fraud is unequivocally a good thing. If Figure’s rails deliver it, the whole industry benefits, including lenders who never touch the platform.
There is one cost worth naming. The same tokenization that pulls fresh on-chain capital into this will, over time, eat into the traditional securitization market that Kiavi itself rode to scale. New plumbing tends to cannibalize the old plumbing.
So, the best lender in the business sold itself to a buyer who wanted exposure to the RTL and DSCR market. Figure bought a lender, but most notably, a head start in private real estate lending. For the industry, this is a defining moment as tokenization enters the space and brings more institutional capital, more transparency, less fraud, and a higher bar for everyone. For private lenders, this is an opportunity to professionalize and lean into their differentiator.
