Digital home lending solutions provider Roostify landed $32 million in funding yesterday, bringing its total capital to $65 million.
The round was led by Ten Coves Capital, and included contributions from Cota Capital, Mouro Capital, Colchis Capital, Point72 Ventures, and JPMorgan Chase. The investment will help the San Francisco-based company make home lending faster and more transparent for all parties by leveraging AI.
The Series C funding comes at a time of growth for not only Roostify, but also the mortgage industry in general. The Mortgage Bankers Association (MBA) estimates that purchase originations will grow 8.5% to a new record of $1.54 trillion in 2021, thanks to low mortgage rates and low housing supply boosting demand.
Roostify has seen the effects of this growth. Last year, the company experienced a 250% increase in the number of applications submitted through its system and processed just under 1.5 million loan applications.
And while Roostify was prepared to handle both the volume and the demand for digital that came in 2020, many mortgage providers were not. “While the recent record-breaking origination volume was certainly welcomed, it also overburdened outdated mortgage lending processes and systems,” said Roostify Founder and CEO Rajesh Bhat. “We need to adopt a digital-first mentality that relies on technology-enabled transformation to solve real business problems. In order to thrive in a digital-first world, mortgage lenders need critical digital transformation initiatives, such as cloud-based technology, self-service solutions for consumers, and meaningful AI deployments.”
Founded in 2012, Roostify helps 200+ lending institutions collectively handle around $50 billion in loan volume each month.
As for what’s next, Roostify said it will continue to focus on leveraging data to transform the mortgage lending process. Key to this goal is the company’s partnership with Google Cloud AI. The two companies announced their collaboration last October in which Roostify began integrating Google Cloud’s Lending DocAI solution into its digital lending platform. As a result of Google Cloud’s AI and ML capabilities, Roostify’s digital lending tool now helps lenders analyze, categorize, and extract data from documents in an automized manner.
Despite the company’s growth, Bhat said that Roostify is “still in its infancy” in terms of its potential impact on the mortgage lending industry. “My team and I believe that it’s not enough to simply do digital lending better. We’re here to empower lenders to go beyond the efficiencies and cost-savings and forge a true connection with the end-user. We’re creating a world where financial success is possible for everyone, thanks to a simplified home lending experience.”
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