Title insurance upstart States Title announced this week $150 million in debt financing from HSCM Bermuda, which will go towards developing a more modern home closing experience.
CEO Max Simkoff said the financing will held them “wipe the system clean” and build a homebuying system from scratch – one that is simple, efficient and digital, he added.
“Home buying, which is already stressful and overwhelming, should set the standard for easing customers’ journeys rather than lagging behind other digital solutions,” Simkoff said in a statement. “[HSCM] sees immense value in how we are overhauling the system and, together, we now have greater capacity to tackle this enormous market, with significant tailwind behind what we’re doing.”
The financing follows a $123 million Series C filed last May, which went towards States Title’s continued goal of digitizing real estate closings.
The debt financing will go towards product development, investment in go-to-market growth, and the refinance of debt to Lennar Corp., which helped fund the 2019 acquisition of North American Title Co. (NATC) and North American Title Insurance Co.
After acquiring NATC’s underwriting in 2019, State Title’s intelligence platform suddenly had volumes of publicly-available closing data. As a result, State Title was able to patent technology that removed entire chunks of the closing process.
Now, even more cash will be allotted towards the company’s technological advances in the field of homebuying, Simkoff said.
“The platform benefits lenders, real estate professionals, title agents, and homeowners, and has become even more crucial as the impacts of COVID-19 and record-low interest rates have created a huge tailwind behind home purchase and refinance,” he said.
States Title focuses on technology in its services, using data science to “create predictive title insurance based on an assigned risk score to indicate how safe a property is from liens or liabilities, helping to achieve faster title processing and more efficient underwriting.”
From 2018 to 2019, State Title grew transaction volume by 100x, according to the company.