Snapdocs raises $60 million to expedite mortgage processing with AI
Real estate tech company Snapdocs today closed a $60 million funding round. According to a spokesperson, the proceeds will be put toward product development and expanding the company’s workforce. (Snapdocs plans to double its 225-employee headcount within the next 9 months.)
Mortgage lending is a complex process due to regulatory constraints, yet banks in many markets have managed to digitize parts of the mortgage journey, according to McKinsey. While hardly flawless, automated processing can give customers a degree of confidence they can afford the property they’re interested in, and some lenders are able to complete the ordeal within minutes as opposed to the weeks it once took.
Snapdoc’s toolset aims to cut down on manual labor by streamlining processes wherever possible. The platform automates scheduling for signings and manages payments to the tune of millions of dollars per month, all while centralizing key information like order history, signer, and notary documents in a single portal. Signing agents can create white-labeled dashboards where clients can send new orders, add documents, and track progress. And those agents get detailed analytics on the backend, including a list of clients that generate the highest profit.
Snapdocs boasts a database of 60,000 notaries that can be searched using an automated search algorithm. Notaries manage and upload their documents to a secure dashboard, from which they can add signing appointments to third-party calendars. They’re also afforded control over which companies can contact them for new signing opportunities.
Above: The Snapdocs dashboard.
Snapdocs’ document processing tech takes PDFs and converts them into files with electronic signature fields, which enables signing from a PC, tablet, or smartphone. That’s a big deal in the real estate industry, where loan packages often contain 150 to 200 pages with electronic signature locations in different locations. Snapdocs’ AI algorithms identify which pages can be electronically signed and which require ink, after which they detect where electronic signature tags are needed and apply metadata that specifies the tag type (e.g. signature field, checkbox, etc.). These algorithms also identify potential paperwork errors and inconsistencies.
Snapdocs says its automated system can prep loan documents containing hundreds of pages in 11 minutes. Moreover, using AI, the platform can automatically sort and annotate closing esignature packages in under 30 minutes.
Snapdocs says its products are now used in over 13% of all residential mortgages in the U.S., or more than $400 billion in transactions annually. The company claims to serve roughly 70% of the settlement industry; as of November 2019, Snapdocs had over 130,000 real estate professionals and 50,000 customers on its platform, and more than 750,000 mortgage closings annually (it expects to surpass 1.5 million closings this year), amounting to $150 billion in transactions. Moreover, Snapdocs says it saw over 100% year-over-year revenue growth in 2020.
“A combination of global and market forces in 2020 have compelled everyone to finally adopt new solutions that solve the core challenges in a mortgage closing, namely the fragmentation and inefficiency inherent in a process involving so many parties,” CEO Aaron King told VentureBeat via email. “Digital closings are here to stay. We expect all of real estate to be completely digitized in the next five years, and this new financing reinforces Snapdocs’ commitment to build an enduring platform that enables a $2-trillion-dollar industry, and its vast network of partners, to make that move.”
Y Combinator’s growth fund, YC Continuity, led the $60 million series C announced today. It had participation from existing investors Sequoia Capital, F-Prime, Founders Fund, and Maverick Ventures, and it brings seven-year-old Snapdoc’s total raised to date to $103 million following a $25 million series B last November.
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