Closing on a new home can be a time-consuming and costly experience. A new startup in Seattle wants to fix this problem and just raised capital from top local investment firms to make it happen.
JetClosing today announced a $2.3 million seed round led by Trilogy Equity Partners, with participation from Maveron. The company is a spinout of Seattle-based startup studio Pioneer Square Labs and its co-founders Geoff Entress, Greg Gottesman, and Mike Galgon are also investing in JetClosing.
The startup is led by co-founder and CEO Daniel Greenshields, who previously spent nearly 15 years helping run ShareBuilder, a company now owned by Capital One which digitized and sped up the process of buying stocks, bonds, mutual funds, 401(K) plans, and more.
Now he’s looking to utilize cloud infrastructure and mobile devices to do something similar, but this time with the home closing process.
Greenshields told GeekWire that technology tools like Zillow and Realtor.com have greatly improved the way people search and find new homes.
“But once you find a house and go to contract, it goes back almost 50 or 100 years,” he noted. “We are building a company to address that.”
JetClosing wants to help buyers, sellers, and realtors ditch paper forms and move the closing process to the cloud. By doing so, the company said it can reduce the amount of closing time, increase transparency, and cut costs by utilizing a more efficient model. JetClosing makes money by charging a fee as part of the transaction when it closes.
“We reduce the man-hours spent re-sending, fixing, re-faxing, correcting, answering questions, or addressing problems that occur because of inaccurate data entry and document preparation,” the company says on its website.
The closing process, which involves banks, title companies, and escrow companies, is highly-regulated and can be tedious to navigate given all the rules. But Greenshields seems confident that his startup has the right solution. He said the current system isn’t necessarily broken, but just costly and slow.
The CEO likened it to how streaming services like Netflix ultimately put stores like Blockbuster out of business.
“Blockbuster wasn’t broken — you got your DVD or your VHS and it was fine,” Greenshields said. “Streaming was just better. We will also do something better, and at a much lower cost.”
Using a mobile-first approach appeals to millennials, he added.
“For the digital natives who are used to using Uber, the current closing experience is pretty frustrating,” Greenshields said. “That is a problem. Most aren’t buying houses yet, but they will.”
There are competitors trying to do something similar, “but they just aren’t good at developing mobile apps,” Greenshields said.
“I came from the brokerage space where we built the No. 1 app as ranked by J.D. Power,” he noted. “I’ve done this before in an adjacent complex and regulated space, and am hoping we can do it again.”
JetClosing employs nine people. As part of the funding round, Trilogy partner Donald Guthrie — formerly vice chairman of Western Wireless and VoiceStream Wireless — will join Greenshields and Entress on the company’s board. Guthrie previously worked with Greenshields on ShareBuilder’s board.
This is the third spinout from Pioneer Square Labs in the past two months. One was LumaTax, a company that aims to automate sales tax reporting for small businesses and in September announced a $2 million financing round. The other is Ad Lightning, which scans digital publishing outlets for disruptive ads that slow down and hurt their sites. It raised a $2 million seed round last month.
Pioneer Square Labs uses a unique innovation model to rapidly test and validate new startup ideas before recruiting an executive team to build out an actual spin-off company. It starts with an original idea and spends roughly four months working hard to quickly validate it, using investment it raised from premier investors for financial support. Then it recruits an appropriate executive team to build off the work that’s already been done and ultimately spin the new startup out of PSL into its own entity.