Mr. Cooper, the nonbank formerly known as Nationstar, is getting into the homeowners insurance business – sort of.
Mr. Cooper isn’t going to be writing its own insurance policies, at least not yet, but the company did invest in Matic Insurance Services, a digital homeowners insurance agency that allows mortgage borrowers to buy homeowners insurance during the mortgage transaction.
According to joint releases from the two companies, Mr. Cooper took the lead in Matic’s $7 million Series A round of funding. Also participating in the funding were Nationwide, the insurance and financial services giant; National General Insurance, one of the largest auto insurers in the U.S.; along with two venture capital firms: Anthemis and ManchesterStory Group.
For Mr. Cooper, the investment is part of its overarching strategy to improve its customers’ experience with the company. To that end, the investment in Matic is only a part of the agreement.
Mr. Cooper will also integrate Matic’s services into its digital mortgage platform, which is set to launch next year.
“Buying insurance has long been a cumbersome process for homebuyers, so we’re excited for our licensed insurance agency, Harwood Service Company, to work with Matic to provide customers a better experience,” said Jay Bray, Chairman and CEO of Nationstar Mortgage Holdings, the holdings company for the Mr. Cooper brand. “Integrating with Matic will help Mr. Cooper offer our customers a simplified insurance process that empowers them with more choice and the opportunity to save money on their homeowner’s insurance premiums.”
Tony Ebers, executive vice president of originations for Mr. Cooper, said that the investment in Matic will help the company provide customers with a “modern, easy-to-use shopping experience that could save them money on homeowner’s insurance and make their homeownership journey more rewarding.”
As for Matic, the company said that it plans to use the new funding to significantly grow its operations.
“Simplifying homeowner’s insurance and bringing policy selection into the home-buying process is a no-brainer — in fact, people often ask us why it’s never been done before,” Matic Co-founder and CEO Aaron Schiff said.
“Matic brings to the table an outstanding technical team, a deep understanding of the mortgage business and unprecedented partnerships with insurance carriers, mortgage lenders and mortgage servicers, some of whom are also our financial supporters,” Schiff continued. “This new funding will support us as we double our team and scale the business to serve our customers in all verticals.”
Up to this point, Matic has been largely financed by private funding, although Mr. Cooper’s investment in the company is not the first time a mortgage company invested in Matic.
Previously, Matic raised $2.3 million in seed funding led by Anthem Venture Partners, a VC firm that primarily invests in early-stage technology companies, and Freedom Mortgage, a nonbank mortgage lender.
Along with Mr. Cooper, Freedom Mortgage also uses Matic’s services, and in recent months, Matic signed agreements with mortgage loan origination and point-of-sale systems like LendingQB, PCLender, BeSmartee, Maxwell and Roostify.