Alex Day had already been chatting about getting into real estate with his colleague, Jai Sim, at the lunch delivery startup Peach, when he went through a process that changed his life in more ways than one. Day made an offer on a house in Bellevue, Wash. and when the sale was near closing, he found the business opportunity he’d been looking for.
Day described the closing process as “just painful.”
“There’s a lot of technology to help find a home, the upstream activity,” Day said. “So you could go on Zillow, you could use Redfin, you go on Realtor.com. You see the homes that are available. As soon as you enter home closing, which is as soon as you’re under contract with a buyer or seller, the home closing process goes back like 50 years in terms of experience and the technology and processes.”
Bringing that process into the 21st Century is the mission of Modus, a new Seattle startup launched by Day, Sim, and Abbas Guvenilir who joined the company as co-founder and CTO. The founders tested their idea at a Madrona Venture Labs hackathon. After winning first place, they decided to quit their jobs and officially launch the company in January.
In July, Modus merged with Best Escrow LLC, officially becoming a tech-powered title and escrow business. Modus is starting by partnering with a select group of real estate agents while the business grows.
Modus hopes to take on industry incumbents by automating much of the work that’s done manually in the title and escrow phase of closing on a home. The startup has also built a secure web app to so clients and agents can communicate with less risk of escrow fraud. That’s a pervasive problem when communications occur via email, according to Day, who serves as Modus’ CEO.
“The problem is, [in] title and escrow a lot of the largest players were founded in the late 1800s and some of them early 1900s,” Day said. “So they’ve been around for over 100 years. They make billions of dollars so there’s not a huge need for them to change and adapt because there’s not a lot of competition.”
Modus recently closed an investment round led by Mucker Capital. Other investors include 500 Startups FinTech fund, Hustle Fund, and some Seattle angels. Modus isn’t disclosing how much was raised in the round. The startup has 11 employees.