Closinglock, a software company in the fraud prevention space, has closed on a round of Series B funding of $34 million.
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Closinglock has secured a Series B round of funding in the amount of $34 million, Inman has learned.
In a Jan. 30 media statement, the mobile-first fraud prevention software company states it has “protected over one million transactions worth over $500 billion and prevented $1.2 billion in losses to fraud so far.”
Sageview Capital led the round and Headline and RWT Horizons supported it. Money will be applied to general company and product growth.
Deployed by title companies, the company’s software is used to secure monies exchanged in real estate transactions.
Despite the large amounts of money required to buy and facilitate a home sale, moving funds from various banks and ensuring deposits are collected is often a morass of disjointed email requests from multiple parties. It’s not challenging for scammers to insert themselves into the often vague digital stream of communication that accompanies today’s home sale.
While many brokerages, banks and title companies offer very secure solutions, many still do not. The loss of funds due to fraud remains a major industry issue, to the tune of close to $3 billion in 2023, according to the FBI’s Internet Crime Report.
Closinglock states it has prevented 8,250 cases of fraud.
“Buying a home is the largest investment most families ever make — but one fraudulent email could send your life savings right into the hands of a scam artist. We’re here to make sure that doesn’t happen,” said Andy White, CEO and co-founder of Closinglock, in a statement. “This latest funding round — and the 1 million transactions already secured by Closinglock — is another vote of confidence in the work we do.”
Closinglock offers the vertical integration of identity verification using Know Your Customer (KYC) and physical ID analysis in conjunction with multiple contact verification and even selfie submission. Funds transfers and wire instructions are individually encrypted and processed by Closinglock’s user portal, and it completes deals with payoff verification and document delivery.
The company’s “Good Funds Payments tool is the only tool in the market that allows homebuyers to securely pay down payments and other funds from their desktop or mobile.” The product provides a $2.5 million insurance policy on user funds.
The funding round tracks clearly with venture capital’s current sentiment toward providing funds. It wants to see traction and more than a mere proof of concept. Closinglock, for instance, has grown 25x over the last three years, doubling its staff to 73 and securing office space, not common these days for young software companies.