Snapdocs, an AI-powered platform aimed at streamlining the digital mortgage closing process, announced this morning it has closed on a $25 million Series B.
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F-Prime Capital led the round, which included participation from previous investors Sequoia Capital (the firm led Snapdocs’ $15 million Series A in 2017) and Founders Fund. The financing brings Snapdocs’ total raised to just over $43 million since it was founded in 2012. The San Francisco-based company went through Y Combinator’s accelerator program in the 2014 winter batch.
Snapdocs claims its platform currently powers over 10 percent of all U.S. residential mortgage transactions, which amounts to about $150 billion in real estate transactions annually. It helps process about 750,000 real estate closings a year and has developed a network of over 50,000 industry service providers such as lenders, title companies and notaries.
Aaron King, the company’s founder and CEO, said Snapdoc is is not out to try and disrupt the industry. It’s instead trying to help its players “work better together.” It also aims to reduce the time borrowers spend at the closing table from over an hour to just 15 minutes by doing things such as giving them the ability to review lengthy documents digitally beforehand, for example, according to King.
“You have 12 different industries trying to interact to make a real estate transaction happen. We’re focused on helping those parties coordinate better,” he said. “Our goal has been to become the connective tissue to help those different industries improve their workflow in a more seamless, automated way by tackling the complex underlying machinery of the entire process.”
King told me that Snapdocs has intentionally opted not to raise too much funding because it’s “not the type of company trying to burn tons of capital.”
“My last company was bootstrapped, so we have that in our DNA,” he told me. “In almost every fundraising round, we’ve had opportunities to raise at higher valuations but we believe if you’re going to build a really enduring company, it’s more important to pick the right partners.”
The company will use the new capital to help “fuel growth” and further invest in its technology. It’s also planning to grow its recently-opened Denver office.
As part of the funding round, David Jegen, managing partner of F-Prime Capital’s tech fund, will join Snapdocs’ board.
“Residential mortgage is a $2 trillion industry and one of the largest sectors yet to be digitized,” said F-Prime Capital’s Jegan in a written statement. “The entire closing process is cumbersome and in need of a better workflow for collaboration, coordination and transparency. Snapdocs has built the leading vertical SaaS solution to this problem and is well-positioned to become the industry’s platform for digital mortgage closings.”
Illustration: Dom Guzman