An Austin-based proptech startup that aims to prevent fraud in real estate transactions raised $34 million in its Series B funding round.
Sageview Capital, an investor based in Palo Alto, California, led the round for Closinglock, according to a release from the startup. Venture capital firms Headline and RWT Horizons also invested.
Closinglock is “eliminating wire fraud,” Sageview founding partner Ned Gilhuly said in the release.
Closinglock has been used for more than a million home sales worth at least $500 billion. The technology is especially relevant with scams on the rise and artificial intelligence exacerbating the threat of fraud. The company claims to have prevented more than 8,000 fraud attempts.
The technology is primarily used with residential transactions but can be used for commercial sales as well.
The capital will allow Closinglock to continue to expand. The company is in the process of finding office space in downtown Austin and doubled its headcount to 73 last year. It also partnered with JP Morgan and Docusign.
News of the funding round comes in the wake of the hey-day for proptech.
The aggressive interest rate hikes of 2022 caused investors to pull back, spelling trouble for former industry darlings like Side and Compass. Both were forced into steep staff cuts at the time.
Investment in real estate technology peaked in 2022 at $1.2 billion and dropped to $1 billion last year, according to the Center for Real Estate Technology & Innovation. Investors are writing bigger checks to fewer startups, resulting in more selectivity and steeper competition, the Center reported.
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