Vishal Garg says he feels betrayed.
“He hoodwinked me,” the recently removed Better Home & Finance CEO said of Daniel Lewis, who stepped into his role last week. Garg claims Lewis won over the company from the inside. “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, best known publicly for cutting 900 jobs over a companywide Zoom call shortly before the 2021 holidays, says his August 3 firing came at the very moment Better was nearing what he believed could be a major comeback.
The online mortgage lender has endured a bruising stretch under Garg’s leadership. At the height of the pandemic refinancing surge, when mortgage rates sat below 3%, Better was valued at roughly $8 billion. But the collapse of the refinance market and borrowing rates now hovering near 7% have dramatically changed the picture. Today, the AI-powered mortgage company’s market capitalization is closer to $300 million.
That steep decline came alongside a string of controversies and setbacks: Garg took a leave of absence after the widely criticized Zoom layoff incident, the company faced a whistleblower lawsuit that was later dropped, and an SEC investigation ended without action. Then came Better’s troubled 2023 SPAC merger, which sent its stock plunging 93%, all while losses continued to pile up. Given that history, Garg’s long run as CEO was, in itself, a surprise.
Still, Garg argues he was on the verge of proving that Better’s turnaround story was real.
After Better’s once-dominant refinancing operation collapsed, annual revenue fell from $1.5 billion in 2021 to just $70 million in 2023. Garg says the company is now tracking toward $200 million in sales this year, a sign, in his view, that the business was beginning to regain momentum.
He credits that rebound to Better’s push into artificial intelligence for mortgage processing, using AI models to handle work that traditionally required teams of employees and several days to complete. Garg says a partnership with Neo Home Loans helped double productivity while cutting loan origination costs by 50%. Those results, he says, helped attract new mortgage services partnerships this year with Intuit, Coinbase and OpenAI. Better has also built a growing home equity line of credit business, giving the company another source of revenue beyond traditional mortgages.
“We’re winning. We’ve tripled loan volume. We’re close to profitability,” Garg said. “We were at the 5-yard line after taking the ball all the way down the field from the other side.”
Garg acknowledges he’s “hard-nosed” and the famous Zoom layoffs severely damaged the company’s reputation — a mistake he knows will continue to haunt him. But as criticized as Garg has been for placing near-impossible demands on the company and its employees, he said Lewis convinced the board he didn’t push hard enough.
Better and Lewis did not respond to a request for comment. On August 4, Lewis posted on X, “There was never a $BETR without @vishal_better. That demands respect.”
‘It’s not about me’
Lewis, a hedge fund manager with a mixed track record of success, approached Garg six months ago with thoughts about cost savings and good ideas about delivering profitability, Garg says.
“(Lewis’) thoughts about cost savings were good. His ideas about innovation were not,” Garg argued. “It’s so much easier when we’re this close for someone to come in and say that they could have done better.”
Lewis was brought on to the board on July 27. A week later, he had convinced the other directors to oust Garg as CEO and name himself as Garg’s replacement.
“It’s not about me,” Garg said. “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.”
But Garg says he believes Lewis hadn’t been forthcoming about his intentions over the past several months, as he advised Garg and convinced him to give him a board seat.
“I suspect he always wanted to become CEO,” said Garg. “The board made a mistake.”
Investors appear to agree with Garg. The stock has fallen 45% since Lewis took over as CEO. (The stock had been down more than 16% this year before Garg’s departure was announced.)
In the week since Garg stepped aside (but remained on the board) he says a number of horrified investors reached out to plead with him to take his CEO job back. Armed with Class B shares with special voting powers — his own and from a group of committed early investors — Garg says he has the votes to win.
He has retained high-powered lawyer Alex Spiro, partner at Quinn Emanuel, to represent him, and he sent a letter to the board on Monday demanding it return him as CEO. He says he’ll work for $1 a year until he returns the company to profitability, and he’ll transition out of the CEO role afterward.
“It’s an acknowledgment that I’ve been doing this for 10 years, but execution hasn’t been perfect,” Garg said. “I hope it gets resolved. I think the future still remains very bright for Better.”
