Courtesy of Snapdocs
Aaron King, CEO of Snapdocs
Snapdocs, a tech startup that aims to streamline the process of finalizing mortgages, has raised a $25 million Series B round of funding.
A wave of startups have been looking to sell a tech spin on processes that touch the real estate space, while touting the data they gather in the process. And that kind of pitch has piqued a lot of funding interest - proptech, a broad term that includes tech around brokerages, tenant experience, real estate data, and more, has seen over $24 billion in VC investment through the third quarter.
Snapdoc's latest funding round was led by F-Prime, Fidelity' Investments venture arm, and was rounded out by returning investor Sequoia Capital, which is one of the oldest Silicon Valley venture funds, and Peter Thiel's Founders Fund. Snapdocs declined to provide a valuation.
Snapdocs, which says it is used in more than 10 percent of US residential mortgage transactions, was founded in 2012.
Aaron King, its chief executive and founder, has been working in mortgages since high school, and launched his first startup, NotaryLink, at 21. He then set out to design a company that makes the current mortgage process easier, instead of attempting to radically disrupt the whole industry.
"Our strategy is to understand the pain points of the many companies involved in real estate transactions and see how they work with each other," King said.
The mortgage process includes up to twelve different participants, said King, and traditionally, there hasn't been a single one that controls every part of the process. Snapdocs highlights errors and identifies areas where the lending document can be e-signed, and then coordinates the finalizing process through the partners involved in a mortgage.
King says that Snapdocs has decreased processing times and the amount of time it takes to actually sign a mortgage. While the company receives most of its revenue from mortgage lenders, it also works with title companies, notaries, and brokerages.
Earlier this fall, the San Francisco-based company announced that it will be opening a new office in Denver and hiring 635 new employees. Snapdocs' intention, said King, is to use the new funding and office to continue to add services aimed at more parts of mortgage lending. While his focus right now is largely on lenders and title companies, he hopes to expand to the rest of the process.
Snapdocs says it is used on more than 750,000 mortgages a year, creating a repository of information about mortgages. Snapdocs says that data helps machine-learning software highlight the compliance risks, company workflows, and all-too-common errors like misspelled names.
King said the company hopes to eventually provide tips to mortgage customers - highlighting the most important parts of the document, for example.
Snapdocs' motive, said King, is not to create a fully digital mortgage. Instead, he said, the company is trying to be "pragmatic about solving the industry."
King says his own mortgage experience pushed him away from the radical disruption of an "MBA approach" and towards a product that looks to improve the current workflow.
"We're obsessed with tech that can be adopted today … instead of sitting around and waiting for it to be perfected" King said.
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