Chestnut

What do they actually do

Chestnut is a licensed mortgage company (NMLS #2688280) that originates purchase loans, rate-and-term refinances, cash‑out refinances, and HELOCs on its website. It is currently operating in a limited set of states (at least Texas and Colorado per YC’s profile) and positions itself as an AI‑first direct lender rather than a marketplace or software vendor Chestnut site YC listing.

Borrowers start online, select a product, and can request an instant quote or pre‑approval. Chestnut advertises a “true mortgage pre‑approval in under 2 minutes,” driven by software that pulls real‑time pricing from many lender pricing engines (their materials cite integrations to “over 100 lenders”) and matches the borrower to an option. If terms are accepted and the borrower qualifies, Chestnut proceeds to close the loan as the licensed lender, subject to standard credit and regulatory approvals pre‑approval process Chestnut site.

The company claims it automates large parts of origination (pricing selection, document collection, and underwriting steps) to reduce manual work and time to close—for example, promoting a 15‑day “digital” cash‑out refi versus a typical 45‑day process—and that comparing across many lenders can save borrowers roughly 0.5%+ in interest. These are company‑reported outcomes and depend on borrower eligibility, partner integrations, and market conditions 15‑day cash‑out refi pre‑approval process.

Who are their target customer(s)

• Competitive homebuyers who need fast, credible pre‑approvals: They lose offers or feel uncertain when pre‑approvals take days and require back‑and‑forth. They want a quick letter that listing agents trust pre‑approval.
• Homeowners seeking rate‑and‑term refis or cash‑out: They’re frustrated by long timelines and heavy paperwork and want a faster, clearer process with predictable closing dates 15‑day digital cash‑out.
• Rate‑shoppers optimizing total interest cost: Comparing multiple lenders’ pricing is time‑consuming and opaque, so they risk overpaying. They want broad, real‑time comparisons in one place pricing integrations.
• Borrowers tapping home equity (HELOC): HELOC options and fees are confusing, and approvals can be slow. They want straightforward terms and faster decisions products.
• Digital‑first borrowers concerned about accuracy and compliance: They want automated speed without sacrificing regulatory protections or quality control. Seeing a licensed lender and clear workflows builds trust Chestnut site.

How would they acquire their first 10, 50, and 100 customers

• First 10: Run a hyperlocal pilot with 5–10 high‑volume realtor teams and a few brokers in licensed states (e.g., TX/CO), hand‑holding each file through the under‑2‑minute pre‑approval and closing to validate speed and gather testimonials pre‑approval YC listing.
• First 50: Expand to 20–30 realtor teams and select brokerages with co‑marketed demos and targeted search/social ads driving to a focused pre‑approval landing page; standardize referral handoff and onboarding to minimize friction pre‑approval.
• First 100: Layer on scaled paid acquisition, simple partner referral incentives, and a few builder/buyer‑agent platform integrations; shift manual ops to scripted automation while broadening state licenses and lender integrations to increase coverage and speed 15‑day cash‑out pricing integrations.

What is the rough total addressable market

Top-down context:

The U.S. single‑family mortgage origination market is roughly $2.0–$2.2 trillion per year in this cycle (MBA forecast), with purchase and refinance volumes comprising the majority; the HELOC/home‑equity market adds meaningful additional volume in the hundreds of billions annually and outstanding MBA forecast NY Fed HELOC MBA HELOC study.

Bottom-up calculation:

MBA projects roughly 5–6 million single‑family loans per year; multiplied by average loan sizes yields ≈$2T+ in annual originations, aligning with top‑down figures. Recent HELOC/home‑equity originations add on the order of hundreds of billions more in annual production MBA forecast MBA HELOC study industry HELOC reporting.

Assumptions:

• MBA origination forecasts are a reasonable proxy for near‑term market size.
• Chestnut eventually expands licensing and capital relationships to access national volumes.
• HELOC/home‑equity volumes remain within recent historical ranges.

Who are some of their notable competitors

• Rocket Mortgage: The largest national digital mortgage lender with fast online pre‑approvals (including a Verified Approval), e‑closings, and broad product coverage competing directly for purchase/refi borrowers.
• Better.com: Tech‑forward direct lender marketing “AI‑powered” experiences, rapid pre‑approvals, and speed‑oriented products like One Day Mortgage/HELOC—overlapping on automation and turnaround time.
• LendingTree: A major rate‑shopping marketplace that distributes borrower leads to many lenders; competes on surfacing multiple pricing options similar to Chestnut’s multi‑lender comparison pitch.
• Figure: Home‑equity specialist offering fully online HELOCs with fast approvals and funding, competing for borrowers seeking quick access to home equity.
• Zillow Home Loans: Mortgage origination embedded in Zillow’s home‑search flow (pre‑approvals and verified letters), capturing competitive buyers at the point of shopping.