Roostify, a digital platform for mortgage lenders, has raised $32 million in venture funding to connect customers and lenders as the residential real estate market continues to boom.
Subscribe to the Crunchbase Daily
While commercial real estate occupancies have taken a hit in some cities as many people continue to work from home amid the COVID-19 pandemic, residential real estate has remained hot. Remote work coupled with low interest rates have led to more residential home buying. Residential existing home sales in the U.S. hit a 14-year high in 2020, according to CNBC.
Roostify allows different parties to bring in data and information from other online sources to streamline the homebuying process.
“I think COVID has really emphasized the importance of solutions like us to our customers,” CEO Rajesh Bhat said in an interview with Crunchbase News. “What we saw were two things: with existing users in our platform, an increase in digital engagement, meaning using more of the solution, turning more of the features on… And two, for existing customers (financial institutions) to add more users as well. Many loan officers who may not have in the past sought to engage with customers digitally.”
Ten Coves Capital led Roostify’s latest round, with participation from firms including Stone Point Capital, Cota Capital, Mouro Capital, Colchis Capital, Point72 Ventures, and JP Morgan Chase Strategic Investments.
While many loan officers in the past would meet up with clients at coffee shops and the like to go over paperwork, now more are opting to go through the process digitally amid the pandemic, Bhat said.
There currently seems to be an “real inflection point for the space as a whole,” Bhat said, with players including regulators and large financial institutions embracing digital adoption.
Real estate tech and financial services are both two areas that saw billions in investment last year. Venture-backed companies in the real estate space raised $8.6 billion in funding last year, while financial services companies raised nearly $25 billion, according to preliminary Crunchbase data.
Roostify, which is based in San Francisco and is profitable, intends to use the funding to invest in artificial intelligence to decrease document processing time and increase accuracy, according to the company. It also plans to expand its team by 50 percent.
Roostify said it now has about 200 lending institutions on its platform—including JP Morgan Chase, TD Bank, HSBC, and Santander Bank—and handles $50 billion in loan volume every month. The company said it saw a 250 percent increase in the number of loans processed through its platform last year.
The Series C round brings Roostify’s total funding to $65 million and follows a $25 million Series B in January 2018.
Illustration: Li-Anne Dias
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.