Real Estate Tech Company Spruce Raises $29 Million
One recurring theme in the world of FinTech has been the ability to conduct virtual, digital transactions whereas in-person meetings were once required. While these innovations first replaced simple functions such as sending money directly to a friend or family member, they’ve grown to include more complex transactions, such as buying real estate. That’s where the company Spruce comes in — and, this past week, the firm got a boost thanks to a successful funding round.
Recently Spruce announced that it had raised $29 million in Series B funding. The round was led by Scale Venture Partners, with participation from Zigg Capital and returning investor Bessemer Venture Partners. Spruce had previously raised $16 million in 2018.
Founded in 2016, Spruce offers APIs built to assist in the real estate buying process and bringing transactions online. From quotes and fee disclosures to title insurance and escrow, the service offers tools for mortgage lenders, real estate investors, and more. According to the company, they’ve enabled more than $1.25 billion in transaction volume and have seen 400% annual revenue growth.
Spruce’s latest funding round arrives at an interesting time for the real estate industry. In April, sales of existing homes reached their lowest point in nearly a decade. Additionally, many would-be homebuyers are starting and continuing their searches online with virtual tours while in-person open houses have mostly halted.
Noting the added importance of Spruce given the current climate, the company’s co-founder and CEO Patrick Burns said in a statement, “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 and refinancing loans to help cover necessary expenses.” Burns added, “Spruce is proud to be supporting our clients on the forefront of this paradigm shift, and excited to provide the best tools to compete in an ever-changing environment.” Meanwhile Alex Niehenke — partner at lead investor Scale Venture Partners — said of Spruce, “We believe that Spruce is playing a critical role in enabling innovation in real estate transactions, While we’re still in the early innings, change is happening fast. 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.”
While it’s surely too early to state definitively, it would seem that Spruce could be among the FinTechs that actually gets a boost from this crisis. Not only do their services offer greater convenience but may also prove to be attractive as a matter of safety. With the company still in relative infancy, it may not be able to boost the housing market single-handedly — but this latest investment could help it propel to the top of what is sure to be a popular industry moving forward.