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ClosingIPO / M&A

Doma goes public, but investors cash out early

Investors in SPAC partner Capitol Investment Corp. redeem 30 million shares

Digital title provider Doma has finally gone public, but has already had to pay out nearly $300 million to early investors who redeemed their shares.

Backers said in March that they expected the SPAC merger to raise $645 million in cash — $300 million provided by private investors, plus another $345 million raised in a December initial public offering of Capitol Investment Corp. V, the blank-check company that Doma was to merge with.

But investors in Capitol exercised rights to redeem nearly 30 million public shares in the company in connection with the merger. At approximately $10 per share, the payouts from the redemption cut the merger proceeds by about $295 million.

With only $350 million in cash available to Doma — below a $450 million contractual minimum threshold — the company had the potential to back out of the deal. But Doma waived the failure to satisfy the “minimum cash condition,” and the merger was closed.

Doma opened at $6.81 on Monday after opening at $8.20 last Thursday — the company’s first day on the New York Stock Exchange. By the end of trading Thursday, Doma stock had fallen more than 10%; however, Doma stock did rise more than 3% on Friday.


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“For us, this transaction is about accelerating our ability to penetrate and revolutionize, first, the antiquated $23 billion title, escrow and closing market, and eventually the broader $318 billion home ownership services market,” said Max Simkoff, Doma CEO. “Our vision is to ultimately make many of the most important home buying experiences instant and digital. We look forward to this next phase as a public company.”

Doma saw revenues of $179.8 million in 2019 and $189.7 million in 2020, according to filings made with the Securities and Exchanges Commission. Generally accepted accounting principal (GAAP) revenues are expected to be around $226.4 million in 2021 and above $600 million in 2023.

Notable Doma clients include Wells Fargo, Chase, Homepoint, PennyMac, and Sierra Pacific Mortgage.

In a release, officials from Doma – which counts NATIC, States Title, and North American Title Company  as part of its family of brands – said the surge in 2020 homebuying and refinancing “unveiled the critical need for the tech-first approach to real estate transactions that Doma is architecting.”

The company currently has less than 1% share of the title market in the U.S. but projects to be at 5% by 2023. Doma is backed by Lennar, one of the nation’s largest homebuilders.

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