Citigroup, Inc. C has made a minority investment in Pylon — a mortgage infrastructure provider. Financial terms of the investment were kept under wraps.

Pylon, a company founded in 2022, aims to completely rewire mortgages. The Pylon platform's enterprise-grade application programming interface (API) provides programmatic funding and originations. Innovative companies in the fields of wealth management, homebuilding, service providers, banks and some lenders are served by the corporation.

More on Citigroup’s Investment in Pylon

The investment was made together with Citigroup’s Spread Products Investment Technologies (“SPRINT”) unit and Citigroup Ventures. With this investment, Citigroup joined Pylon’s existing investors, Conversion Capital, Allegis Capital, Peter Thiel, QED and Fifth Wall.

Along with the investment, Citigroup and Pylon are collaborating to incorporate the Pylon platform with the industry-leading liquidity provided by Citigroup's mortgage trading desk. Customers of Pylon will have direct access to Citigroup's institutional-grade rates and products.

Citigroup’s investment in Pylon will help automate mortgage origination and provide interim funding to consumers until the loans reach the capital markets. This technology platform helps to reduce origination expenses.

Through its trading desk, Citigroup will be able to buy Pylon mortgages, provided that specific underwriting requirements are met. The bank can then choose to package them into mortgage-backed securities or sell them.

Management Remarks

“We’re pleased to have secured this investment from Citi, which marks a significant milestone for Pylon,” said Trent Hedge, founder and CEO of Pylon. “Our connectivity with Citi’s mortgage trading desk delivers the same unobstructed access to Wall Street that was previously only available to the largest market participants,” Hedge added.

"Pylon's next-generation, multi-product platform is built on an intelligent core. We're excited to launch this strategic initiative and deliver the scale of our industry-leading Spread Products business to Pylon," said Patrick Brett, head of Citi SPRINT Investments.

Citigroup’s Zacks Rank & Price Performance

Shares of Citigroup have gained 15.3% over the past six months compared withthe industry’s growth of 28.8%.

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At present, Citigroup carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked bank stocks are Raymond James Financial, Inc. RJF and BGC Group, Inc. BGC, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RJF’s earnings was revised 4.2% upward for 2024 over the last 30 days. RJF shares have gained 40.8% over the past six months.

Earnings estimates for BGC have been revised 6.5% for 2024 over the past 30 days. In the past six months, BGC shares have risen 18.1%.

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