States Title, a San Francisco-based startup aimed at streamlining the title search and closing process, will go public following a $3 billion merger deal with blank check company Capitol Investment Corp. V.
States Title is rebranding as Doma, the Latin word for ‘dwelling,’ and will use the funding to grow its team, enter new markets and develop new products. The merger is expected to yield $645 million in cash proceeds, including a $300 million private investment in public equity (PIPE), and $345 million that will be held in the trust account of Capitol Investment Corp. V.
PIPE investors include Lennar, an existing Doma shareholder and the nation’s largest homebuilder, Spencer Rascoff, the co-founder and former CEO of Zillow, and funds and accounts managed by firms such as BlackRock, Fidelity Management & Research Company LLC, The Gores Group, Hedosophia, SB Management, and Wells Capital. Doma is anticipated to retain up to $510 million in cash proceeds, according to a press release.
The surge in home buying activity that occurred in 2020, coupled with a reliance on digital tools due to the pandemic, underscored the need to modernize the closing process. The real estate industry has been notoriously slow to adopt new technologies, however, there has been a large number of acquisitions and mergers in the proptech sector since the beginning of the COVID-19 crisis.
“Right now, our patented machine intelligence technology reduces title processing time from five days to as little as one minute — our goal is that the entire mortgage closing process move from a 50+ day ordeal to less than a week,” said Max Simkoff, Founder and CEO of Doma.
Since launching in 2016, Doma has conducted over 800,000 real estate closings for lenders like Chase, Homepoint, PennyMac and Sierra Pacific Mortgage. Combining machine learning with human expertise, the company says it makes the closing experience faster and more affordable. Doma currently offers services such as instant underwriting, instant closing disclosures and digital closings.
“This partnership with Capitol demonstrates their confidence in our strong growth position as we continue our sprint to architect the future of real estate transactions,” added Simkoff.