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Spruce launches new digital tool for real-estate closings amid proptech industry boom that's pushed traditional home buying and selling online

Published by Business Insider on Tue, 12 Jan 2021


<p><img src="https://static2.businessinsider.com/image/5ffcbb4dd184b30018aae2ae-1400/Spruce Founders Headshot.jpg" border="0" alt="Spruce founders Patrick Burns and Andrew Weisgall" data-mce-source="Spruce" data-mce-caption="Spruce founders Patrick Burns and Andrew Weisgall"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Spruce, a real estate tech company that creates software closing tools for residential real estate, is launching a white-label version of its closing service. SprucePowered will allow proptech companies to create their own title agencies, bringing the entire closing process in their own firms, without having to build their own solution or acquire a digital closing company.</p><p><a href="https://www.businessinsider.com/proptech-property-technology-firms-companies-investors-winners-losers-2020-12">The news comes in the wake of a massive year for proptech</a>, as early pandemic shutdowns highlighted the importance of digital tools among real estate professionals and consumers. Residential real estate specifically had a banner year, with 2020 setting <a href="https://markets.businessinsider.com/news/stocks/pending-home-sales-climb-record-august-housing-market-rally-economy-2020-9-1029636297">records for home sales</a>, bringing outsized attention to the companies that provide nontraditional ways to buy, sell, or finance the purchase of a home.&nbsp;</p><p>With its newest offering, Spruce is presenting itself as the digital closing tool that can power these sorts of forward-looking companies, from iBuyers to tech-oriented brokers. While Spruce has partnered with companies like this in the past, its newest product gives clients total control of their own title agency, using Spruce's software to run the ship behind the scenes.</p><p>"Proptech companies have unique customer experiences and therefore unique customer experience needs," Patrick Burns, CEO and co-founder of Spruce told Insider. "These companies recognize that the best way to fulfill that consumer need is to offer additional services in the real estate transaction to become more of a one-stop-shop so they can control that customer experience."</p><p>For these companies, the ability to keep the transaction seamless, and digital from end-to-end, is paramount. What this has meant in the past is that they can either build their own digital closing tools, acquire a digital closing company, or partner with a third-party provider, like Spruce.&nbsp;</p><p>Some of the biggest names in real estate, like <a href="https://www.opendoor.com/w/blog/welcoming-os-national-to-opendoor">Softbank-backed Opendoor</a> and <a href="https://www.businessinsider.com/compass-acquires-modus-startup-title-insurance-escrow-real-estate-2020-10">Compass</a>, have been able to acquire title companies, while others have tried to build the infrastructure themselves. Proptech companies like States Title and industry-backed digital closing companies like First American-backed Endpoint have also sprung up to provide digital closing to everyone from traditional brokerages to cutting-edge real estate tech companies.&nbsp;</p><p>Burns told Insider that this product grew out of the "custom needs" of some of its current client base. Different value propositions require different customer experiences: a discount broker needs a closing solution that prioritizes cutting costs above all else, while more luxury-oriented, concierge services should closely walk customers through the closing process, providing advice the whole way. This white-label solution allows Spruce to customize how it works for each client.</p><p>"Our mission is to turn every transaction into a one-click checkout, but that takes so many different forms in so many different transactions," Burns said. "We are providing the infrastructure, the tools, the picks, and shovels of this evolution."&nbsp;</p><p>Spruce has raised $50.1 million in funding since its founding in 2016, most recently raising a $29 million Series B in May 2020. The company said that it has seen a 450% increase in transactions during 2020. While SprucePowered is trained at the proptech industry, the company also works with real estate investors, <a href="https://www.businessinsider.com/single-family-rental-companies-institutional-backers-homes-wall-street-2020-12">like single-family rental companies</a>, allowing them to bring homes through the closing process in bulk. The company also works with lenders to add digital closing to their mortgage process.</p><p>Spruce's main product makes its money through a closing fee and a premium it charges as the "agent of record" in the title insurance transaction, the traditional revenue stream for closing companies. With this new product, clients receive both of those revenue streams, and then pays Spruce a flat fee that corresponds to the volume of transactions.</p><p><a href="https://www.businessinsider.com/spruce-digital-online-real-estate-closings-proptech-2021-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-its-like-travel-during-coronavirus-outbreak-planes-airports-virus-2020-3">Here's what it's like to travel during the coronavirus outbreak</a></p>
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