U.S. real estate technology company Doma said on Tuesday it has agreed to go public through a merger with blank-check acquisition firm Capitol Investment Corp V in a deal valuing the start-up at around $3 billion, including debt.
It comes amid a boom in the U.S. housing market with home sales last year totaling 5.64 million, the most since 2006, according to the National Association of Realtors.
The housing market is being supported by cheaper mortgages and an exodus from city centers as companies allow employees to work from home because of the COVID-19 pandemic
San Francisco-based Doma sells a system designed to make the closing of real estate transactions more efficient. The company was founded in 2016 and its board members include ex-U.S. Treasury Secretary Larry Summers and tech industry veteran Karen Richardson.
“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,” founder and Chief Executive Max Simkoff said in a statement.
Doma, formally known as States Title, said it expects the deal will provide it with up to $645 million in cash. Capitol Investment Corp V is providing $345 million, with the rest coming from a private investment in public equity (PIPE) transaction. Investors in the PIPE include BlackRock, Fidelity, and a subsidiary of SoftBank Group Corp.
Capitol Investment Corp V is a special purpose acquisition company (SPAC) led by investor Mark Ein. It raised $345 million in an initial public offering on the New York Stock Exchange last year.
“When we met Max and his team and saw what they were doing to disrupt this antiquated title industry, we decided we were going to focus all of our attention on Doma,” Ein said in an interview.
Source: Reuters.com