Digital title and closing startup Spruce announced this week that it has raised $29 million in new funding, which it will use to fuel additional growth and beef up its technology.
The cash infusion comes as part of a Series B funding round. Scale Venture Partners led the fundraising, and a handful of other venture capital firms participated as well. In a statement, Spruce said it will use the money to support its “team’s expansion, accelerate development of its proprietary technology, and deepen integrations with client partners.”
Patrick Burns
Spruce co-founder and CEO Patrick Burns added in the statement that “in these uncertain times, innovative mortgage lenders and real estate companies that support digital transactions are providing essential services to consumers, ensuring that critical moves are still possible.”
Spruce first launched in 2016. The company offers a digital platform that handles title insurance and escrow services. The goal is to streamline the process of closing a real estate transaction and improve efficiency.
New York-based Spruce maintains operations hubs in New York, Texas and California, but facilitates transactions across the U.S. According to its statement this week, it has so far “enabled over $1.25 billion of transaction volume” and is “growing revenue by more than 400 percent annually.”
In 2018, Burns told Inman that moving toward more paperless transactions improves transparency for consumers. He also said the company wants to work with “other branches of the real estate ecosystem to create an end-to-end experience that works better for everyone.”
The comments came shortly after Spruce had raised $15.6 million in a Series A-1 funding round.
Spruce’s goal of moving more of the transaction online, and of contributing to an end-to-end platform, make it part of a broader class of companies currently working to disrupt some of the more analog parts of the real estate industry. Other notable examples include Qualia, a title company that has pioneered all-digital closings, and Notarize, which connects consumers to remote notaries.
Earlier this week, digital closing startup States Title also announced that it had raised $123 million in new funding.
A number of larger firms such as Realogy, Zillow and Redfin have also worked in recent years to grow their own platforms so they capture more components of the transaction.
The latest Spruce funding consequently fits into a pattern of growing investment in parts of the real estate transaction that until recently have tended to remain analog even as the rest of the industry moved online.
Alex Niehenke
In a statement this week, Alex Niehenke, a partner at Scale Venture Partners, said that digitization process is still in its early stages. But he also expressed optimism about Spruce’s role in the industry’s transformation.
“We believe that Spruce is playing a critical role in enabling innovation in real estate transactions,” Niehenke said, adding that “it’s only a matter of time before the manual processes in real estate transactions are transformed by digitization, connectivity, automation, and streamlined customer experiences.”
