By Meghan Hall
The real estate industry is ripe for change, and as a result, a number of new technologies are coming to market and quickly growing. Doma, which seeks to streamline real estate transactions using machine intelligence and other tech solutions, is just one of these firms. Recently, the firm not only went public, but announced its second quarter financials. The Registry spoke with Doma’s CEO and Founder Max Simkoff to discuss the future of the company and how it plans to evolve now that it’s gone public.
Please talk a little bit about Doma, which seeks to “architect” the future of real estate transactions. What were the main pain points within the real estate industry that the technology seeks to solve?
Doma is making the process of closing on a home faster, easier, and more affordable. Most residential real estate transactions today use a process which was developed in the 1890’s, supported by technology from the 1990’s. It’s slow, opaque, and frustrating. The title process alone takes three to five days of manual research and analysis, and the end-to-end closing process takes upwards of 40 days. Using a combination of proprietary technology via the Doma Intelligence platform and specialized operations, Doma makes it possible for people to close on a mortgage in less than a week.
Can you talk a little bit about how Doma—as a technology—functions?
Our Doma Intelligence platform is an end-to-end, autonomous, cloud-based software platform that is being trained and optimized on 30 years of historical title data, compiled by our title business formerly known as North American Title Company. Our technology uses data science, natural language processing, and machine intelligence to make closing a mortgage better, faster and less expensive for prospective and current homeowners, lenders, real estate agents, and title agents. Put another way, Doma is using technology to replace the tedious, manual processes of the past to create an instant, digital experience for all involved in the closing of a real estate transaction.
Why did Doma elect to go public via a merger with Capitol Investment Corp? Can you talk about the merits of this strategy? The challenges?
We chose to go public via SPAC because it allowed us to share growth projections with investors while simultaneously continuing to meet and exceed those projections and prove our business model. For Doma, going public was about accelerating our mission to disrupt the industry and make closing a real estate transaction instant and digital. I think any path to going public comes with similar challenges, so I wouldn’t say there was anything unique to the SPAC process in that regard. 2021 has seen several very successful PropTech companies go public (i.e., Opendoor, Blend, Hippo, Doma). This is a strong signal that the market is ready for technological innovation in real estate, especially as adjacent companies – like Doma’s large mortgage lender customers like Chase, PennyMac, and Wells Fargo – come along for the ride.
Doma recently shared its first earnings report after going public. As of May 2021, total revenues up 80% to $128 million and gross profits up 98% to 26 million YOY. Can you talk a little bit about what these numbers—as well as what they indicate for the company?
Doma’s Q2 earnings demonstrate that the business is growing quickly and sustainably. We booked our first revenue in 2018, and our Q121 and Q221 earnings demonstrate we are outpacing incumbent growth and gaining market share. In our self-funded plan shared during the going-public process, we had projected market share growing from one to five percent by the end of 2023, which is significant in an industry where market share has been dominated by only four companies for a very long time. Often, the kind of inflection point we’re hitting in our growth has its upside reserved for private investors; we feel incredibly lucky to have debuted on the public markets when we believe the best is yet to come.
What specific business strategies has Doma implemented in order to maintain a competitive edge in the industry?
When we released our Q2 2021 earnings, we also announced that we’ve raised guidance for the remainder of the year. We demonstrated that we were able to meet and exceed our own bar, putting our Doma Intelligence platform to work to deliver faster, better, and less expensive residential mortgage closings. We’ve spent the past four years and invested tens of millions of dollars building this full stack, insurtech platform from the ground up to attack a massive market opportunity. This is our competitive moat, with top tier data scientists, product managers, and software engineers building what we believe is truly game changing technology. Our competitive advantage is also evidenced by the expansion of our geographic footprint, as we now cover more than 75% of residential mortgage volume across the country, and the fact that we work with top mortgage lenders including Wells Fargo, PennyMac, Fairway, Homepoint, and Chase. We are just as bullish today as we’ve ever been that we will maintain our competitive edge and be a long-term, high-performing public company.
What are Doma’s plans for future growth and expansion? What aspect of the future are you most excited about and why?
We envision a future where someone can sign a purchase contract for a home on a Friday and move in the following Monday, with mountains of paperwork eliminated by our tech. That vision is what excites me the most. I went through an agonizing homebuying process before I founded Doma, and the thought of no one having to go through that again fuels me. Doma is using technology and deep operational expertise to remove the friction and frustration from closing a real estate transaction. This is long overdue; the next generation of homeowners will not tolerate archaic processes simply because they have been the status quo. We’ll get there by effectively covering the entire United States market by 2023 – we’ve already increased our coverage within the Doma Enterprise channel so we are now able to serve more than 75 percent of the residential mortgage volume across the country. We’ll also expand our proprietary technology. We currently have five pending U.S. patent applications that will advance our machine-learning capabilities, on top of the three patents we already have. And, we’ll work with some of the largest bank and non-bank lenders in the U.S. on refinance transactions, and work to move purchase transactions onto the Doma Intelligence platform by the end of the year.
Is there anything you would like to add or anything that we should be asking?
Thanks for asking – I’d say Doma has always been, and remains, focused on our vision for the future. Our mission is rooted in creating long-term value across the real estate transaction spectrum and meeting rising consumer expectations for a digital-first home buying experience is where we will continue to focus in order to drive long term value for our employees and shareholders. We’re a public company now but our principles will not change. We’re still laser-focused on creating a better real estate transaction for everyone involved.