Digital mortgage and fulfillment platform Maxwell has raised $16.3 million in a Series B funding round, the company said on Thursday.
The round was led by Fin VC and TTV Capital. Other investors included Rotor Capital, The Mortgage Collaborative Emerging Technology Fund, Prudence Holdings and existing investors including Anthemis Group, Route 66 Ventures, and Sovereign’s Capital. The capital raise follows a $5 million Series A funding round in June 2020.
Maxwell, which markets its product to small and mid-sized lenders, uses artificial intelligence to streamline and accelerate the mortgage process for community lenders and their borrowers. In short, their AI platform, which is built on aggregated loan data from its network, allows loan officers, processors and underwriters to offload manual, arduous tasks.
It’s a big market they’re targeting, too: community lenders represent 50% of $4 trillion U.S. mortgage market. Clients include Credit Union of Colorado, Texas Lending and JMAC Lending.
Most startups in the digital mortgage space have focused on the application process; Maxwell, however, joins the growing chorus of companies looking to digitize the entire mortgage transaction.
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“Community lenders are uniquely positioned for growth by delivering superior and tailored lending products to their markets,” John Paasonen, Maxwell co-founder and CEO, said in a statement. “These lenders excel in their local knowledge, local relationships, and local relevance — strengths that will serve them well as Gen Xers and millennials seek homeownership in high numbers. As markets shift and borrower expectations change, Maxwell will continue to simplify and modernize the mortgage process for community lenders who impact the lives of homebuyers and homeowners across the United States, and ensure lenders on its platform are poised to be the most competitive in their market.”
Founded in 2016, Maxwell claims it has facilitated over $100 billion in loan volume to date through its platform. In 2020, the company says it surpassed $6 billion in monthly loan volume on its platform. Maxwell claims the loans on the platform close 50% faster than the national average.
The startup’s premise is that small and midsized lenders have struggled to offer cutting-edge technology, scale effectively and hire the talent needed to meet the demand in boom markets. Paasonen is keen to offer products that allow lenders to compete for millennial business. They currently represent the largest home-buying segment at 72 million people, are digital natives and tend to distrust large banks.
Maxwell will use the additional capital to accelerate product development, market penetration, and product and engineering recruitment.