The COVID-19 pandemic helped accelerate the mortgage industry’s digital transformation by years, and proptech firms such as Snapdocs have capitalized on the opportunity.
The company just raised $60 million in a Series C funding as the digital mortgage space bursts with activity in a booming housing market.
Snapdocs, which has raised $103 million in venture capital funding since 2014, said that its platform is on track to process 1.5 million digital mortgage closings this year, more than double its volume from 2019.
The firm, led by CEO Aaron King, has added dozens of enterprise customers to its platform this year, including large national lenders Bell Bank and LeaderOne Financial Corp., regional lender Googain and local credit union Georgia United Credit Union. It claims to now have 130,000 real estate professionals.
“We’re feeling tremendous growth on the digital closing front which is really, really exciting,” Snapdocs Founder and CEO Aaron King said in a statement. “And so a lot of our growth is coming from new lenders signing up on Snapdocs to process digital closings at scale.”
Snapdocs’s $60 million funding round comes less than a year after it raised $25 million in a Series B. YC Continuity led the latest round, with participation from all existing investors, including Sequoia Capital, F-Prime Capital and Founders Fund, as well as new investors Lachy Groom and DocuSign.
“In 2013, Snapdocs began as a notary marketplace before expanding horizontally to service title companies and, more recently, lenders,” YC Continuity Partner Anu Hariharan said. “By connecting the numerous parties involved in a mortgage on a single platform, Snapdocs is quickly becoming the ‘operating system’ for mortgage closings. Mortgages, much like commerce, will shift online, bringing improved efficiency and a far better customer experience to the outdated home-closing process.”
Snapdocs offers a cloud-based suite of products that connect all constituents involved in a mortgage closing to simplify the process across all types of closings. It allows lenders, settlement agents, title companies, borrowers, notaries and more to come together online to close more deals at lower costs.
“The pandemic has changed real estate forever,” King said. “We’ve long talked about digital closings, but the incredible combination of global and market forces have compelled everyone to finally adopt digital solutions that solve the core challenges in a closing: the fragmentation and inefficiency inherent in a process involving so many parties.
“This record year and new capital will allow us to scale in all capacities and continue to serve our customers as they break new records and navigate these unprecedented times,” King said.
While technology has been advanced enough for full eClosings a while, King explained in an interview with HousingWire that there are other factors standing in the way of complete adoption.
“All the technology for digital closings has been around since the early 2000s,” King said. “You have to take a step back at some point, ask yourself why on earth isn’t this getting adoption. And the truth is, from our perspective, it’s not so much a specific technology challenge (although there are many technology challenges) it’s a workflow challenge.”
“How do you orchestrate and coordinate multiple parties around the closing and around these new closing methods?” King continued. “When there’s no single constituent that’s choosing the constellation of companies and people involved in the transaction.”
For those just beginning their digital journey, King has some advice: start slow.
“You can’t skip to the last page of the book; you can’t go from full paper to full digital scale,” he said. “You have to figure out what this transition looks like. Every lender needs to recognize that you’ll be doing a mix of closing types for years and years to come – minimum five years but probably longer.”