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Chip off the old block(chain): Mike Cagney, co-founder and CEO of Figure

Mike Cagney, co-founder and CEO of Figure, which seeks to transform financial services through blockchain, speaks with Acuris Capital Intelligence about potential exits for its business lines and the company’s pending bank charter.

Interview by Rachel Stone

Q. Could Figure seek the public market?

Our intent had always been to divest our operating companies [lending, marketplace, and payments] in a way that would take advantage of the best market opportunities, whether public or private.

Our lending company, for example, could potentially hit the public market in the next 12 to 18 months. That would be the beginning of Figure breaking apart those underlying operating businesses, where we accrued a lot of value.

We’re constantly approached by SPACs in terms of feedback in all our parts of Figure. De-SPACing all of Figure doesn’t make a ton of sense because of the diversity of the business. De-SPACing some of Figure could, so we have those discussions.

The lending business is at a level of maturity – and the marketplace and payments businesses are very close to that level – where we’ll start having more significant discussions around potential exits.

Q. Would you consider a SPAC merger for the lending business?

We’ve fielded inquiries across all three parts of the business. With lending, we’re much more likely to go the IPO route.

The real benefit of the SPAC is it lets you tell a forward story where you haven’t necessarily demonstrated the traction historically. With lending, we have the traction.

With some of the things we’re doing in the marketplace—such as launching securities—and some of the things we’re doing on payments with the USDF network [an application for a consortium of FDIC-insured banks built on top of the public Provenance Blockchain], there is a forward story to tell. They’re probably more conducive to SPAC transactions than the core lending business.

Q. Is there any update on Figure’s bank charter application?

We have a charter on file with the Office of the Comptroller of the Currency and we’ve been very active in answering their questions. We’re slowing that process down because we’re waiting to get better visibility from the Fed in terms of how it is going to align on crypto regulations.

In the context of crypto regulation, it’s unclear at this point what banks will be able to do and not do. Because we do a significant amount of work on blockchain and in the crypto universe, that’s an important area for us to have visibility.

Q. Would you consider acquiring a bank?

We’re always in discussions on the acquisition side, in particular as it relates to banks. There are many circumstances where that could be a very synergistic play for us—whether within Figure itself or potentially integrated into the lending company. We have a dialogue around that in at least one or two situations at any point in time.

A bit of background: Figure hopes to transform the trillion-dollar financial services industry using blockchain technology. In the past three years, Figure has unveiled a series of fintech firsts using the Provenance Blockchain for loan origination, equity management, private fund services, banking and payments. Mike Cagney is the co-founder and CEO of Figure, where he leads corporate strategy and development. He has extensive experience in the financial industry, having previously serving as CEO, chairman and co-founder of SoFi.

This interview has been edited for clarity and length.