Doma, formerly known as States Title, to go public via SPAC
San Francisco-based title insurer Doma, now known as Doma, announced it will go public through a merger with SPAC Capitol Investment Corp. V in a deal valued at $3 billion, including debt.
Founded in 2016, the company initially focused on improving the title and closing process. In 2018 it launched its first core product: “an algorithmic, instantaneously underwritten refinance title insurance policy.” In 2019 the company acquired North American Title Co. and North American Title Insurance Co. And today, the company states that customers rely on it for much more than just instant title – Doma lists two other products on its site – Instant Closing Disclosure and Remote Closings. To date, Doma has facilitated over 800,000 real estate closings for leading lenders such as Chase, Homepoint, PennyMac, Sierra Pacific Mortgage and many more.
Last month, Doma announced a $150 million debt financing from HSCM Bermuda, which has previously invested in the company. The financing followed a $123 million Series C filed last May.
“I founded Doma to remove friction and frustration from home-buying and to make closing on a home as simple and efficient as booking a ride or ordering a meal. In 2020, adoption and usage of our core product exceeded our expectations. We pushed hard against our product and operational expansion road map and this accelerated momentum is helping remove friction from the home buying and refinancing experience. 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. 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.” – Max Simkoff, founder and CEO of Doma.
“Our mission at Capitol is to help build industry-leading public companies that deliver long-term value. Doma is an industry disruptor that is well on the way to doing just that, having already emerged as a market leader in the real estate industry with its proprietary technology solutions that are revolutionizing the title and escrow process. Through this transaction, Doma will be uniquely positioned to capitalize on the market opportunity to provide much-needed and long overdue innovation to the home closing experience. We are excited to work with Max and the talented Doma team to make the future of real estate transactions a better, faster and more accessible experience for homeowners, and we are confident that together we can deliver superior returns for shareholders long into the future.” – Mark Ein, Chairman and CEO of CapitoI.
The transaction is expected to provide up to $645 million in cash proceeds, including a fully committed PIPE of $300 million and up to $345 million of cash held in the trust account of Capitol. Investors anchoring the PIPE overall include funds and accounts managed by BlackRock, Fidelity Management & Research Company LLC, The Gores Group, Hedosophia, SB Management, a subsidiary of SoftBank Group Corp., and Wells Capital. Existing Doma shareholder, Lennar, has also committed to the PIPE and Spencer Rascoff, co-founder and former CEO of Zillow Group, has committed a personal investment to the PIPE.
Existing Doma shareholders will own no less than approximately 80% of the equity of the new combined company. Upon completion of the transaction, Doma will add up to approximately $510 million of cash to its balance sheet to fund operations and support new and existing growth initiatives. All references to cash on the balance sheet, available cash from the trust account and retained transaction proceeds are subject to any redemptions by the public stockholders of Capitol and payment of transaction expenses.
The transaction, which has been unanimously approved by the Boards of Directors of Doma and Capitol, is subject to approval by Capitol’s stockholders and other customary closing conditions.
