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Snapdocs, a digital closing services provider, announced the closing of a Series C investment round of more than $60 million. The funding was shared in a press release from Snapdocs to Inman.
The financing was led by YC Continuity, the growth fund for Y Combinator. Other investors contributing were Sequoia Capital, F-Prime and Founders Fund, all original backers of the company. DocuSign, not an original investor, was also a part of the round. YC Continuity partner Anu Hariharan will join the board of Snapdocs.
In less than a year, investment in Snapdocs has surpassed $85 million, signaling a fast rise in the adoption of digital home closings.
The company provides mortgage lenders a technological workflow for streamlining closings by uniting all critical stakeholders online, from borrowers to notaries.
The funding is aimed at increasing the company’s reach within the industry, which remains wide open for additional digital streamlining as the real estate market continues to surge amidst low mortgage rates and relocation trends largely attributed to pandemic-driven lifestyle decisions.
According to the company, its software plays a role in 13 percent of all residential mortgages closed in the United States, serving more than 70 percent of the settlement industry.
The COVID-19 pandemic put unexpected pressure on the real estate industry as a whole to modernize, encouraging agents, title companies and lenders alike to fast-forward plans for better, more efficient online processes and those that could be conducted at arm’s length.
However, while virtual home tours, for example, have leveled off as a percentage of total showings, “there’s no going back,” on this facet of the industry’s evolution, according to Aaron King, co-founder and CEO of Snapdocs.
“There’s no question that digital closings are becoming the standard way to close home loans in the county,” King said in a phone call with Inman. “There’s no way you can take back this automated, beautiful experience for the consumer, who knows the documents before hand, can e-sign everything and electronically execute it all at their leisure […] ”
Remote Online Notarization (RON) is perhaps the most familiar example of a part of the process largely thought difficult to make electronic. It, too, is growing quickly. Snapdocs state-specific software embraces both RON and hybrid closings, which are conducted in person using web-based technologies.
Snapdocs powered approximately 170,000 closings in August, according to the release, accounting for nearly 15 percent percent of all deals done that month nationwide. The company also stated it’s on track to surpass 1.5-plus million closings in 2020, more than doubling its volume from 2019.
Its software is deployed by a number of notable lenders, including LeaderOne Financial Corporation and Bell Bank. In 2020, it claims to have tripled the number of real estate professionals using its solutions to total more than 130,000.
“Once you have a critical mass of lenders engaging in this type of closing method, the whole industry has to get on board rather quickly, because there are so many ways they’re impacted,” King said. “[For example] you can attract the best loan officers because you have the best closing technology and the happiest consumers.”
Y Combinator is an investor in a large group of notable technology companies, including Dropbox, Airbnb, Stripe and DoorDash, and combined, its companies are valued at more than $100 billion.
“Our entire product is oriented around defragmenting this environment, so when a lender plugs into us, we standardized their interactions across all the settlement partners,” King said.
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Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.