It’s been a good week for virtual notary services, which have seen a big bump in business during the COVID-19 pandemic.
On Tuesday, DocuSign announced it had acquired Austin-based startup Liveoak Technologies for $38 million in an all-stock transaction.
In announcing the deal, DocuSign said it made the buy “amid increasing demand for solutions that enable the remote completion of agreements that traditionally required in-person contact.”
Meanwhile, digital notary platform Notarize on Tuesday announced that it had closed on a $35 million Series C round of funding in March, bringing its total funding to date to $82 million. Real-estate focused venture capital firm Camber Creek, Boston-based Polaris Partners, and other existing strategic investors led the round.
Since that time, Notarize founder and CEO Pat Kinsel said the startup has seen its business surge by more than 400% since March “ as businesses and consumers seek transaction liquidity in this new environment.”
Once the coronavirus pandemic hit, Boston-based Notarize said it moved quickly to scale its operations and enhance its technology. It opened its platform for its partners’ notaries to complete their own transactions and is adding 1,000 new notaries to its team to meet demand.
“And with the new clients we’ve recently won, combined with five additional states passing legislation, the surge in volume will continue to accelerate,” Kinsel said. “2020 is the year of digital notarization and online real estate closings.”
Some context
Liveoak uses web-based videoconferencing, collaboration features, identity verification and other tools to help complete an auditable transaction remotely. It counts some of the world’s largest financial institutions as customers.
Founded in 2014, Liveoak has raised a known $13.5 million, according to Crunchbase data. Its last fundraise was an $8 million Series A led by S3 Ventures that also included participation from State Farm Ventures, Northwestern Mutual Ventures and Broadhaven Capital Partners, among others.
DocuSign’s buy of Liveoak is not entirely a surprise considering the two have been partners. DocuSign eSignature is integrated with Liveoak’s agreement-collaboration platform.
DocuSign said it plans to leverage Liveoak’s technology to speed up the launch of DocuSign Notary, a new product in its Agreement Cloud suite that focuses on remote online notarization (RON) and will enable notarized transactions via video.
That’s slated for early-access availability later this summer.
Increased demand
As for Notarize, the startup’s services apparently helped influence Senator Robert Rodriguez, D-Colorado, to “finally pass the authorization of remote notaries in Colorado.”
“Although it took a pandemic, I am no less inspired by Notarize and all the stakeholders working together to get this done in a strong bipartisan fashion,” he said in a written statement. “This bill was desperately needed in our current environment with COVID.”
Indeed, Notarize said the pandemic fast-tracked both market acceptance and business operations for the company. Over the past 90 days, it has onboarded more than 1,600 notary applicants.
Notarize also said it has accelerated the rollout of its Ellie Mae Encompass partnership and integration “so mortgage lenders may offer online closings with minimal setup.”
The company added that it is expanding the market for mortgage lenders considering that Fannie Mae and Freddie Mac have permanently eliminated the waiver requirements for lenders to perform RON mortgage closings.
Notarize also noted that demand for its SaaS-based platform has been particularly high for real estate transactions, with over $7 billion ordered in June alone, as people seek to complete closings, refinance and take advantage of historically low interest rates. To help facilitate digital solutions throughout the industry, Notarize has opened its platform to independent notaries and title agents in thirteen states.
Notarize said it has also updated its real estate eligibility service’s footprint in response to leading title underwriters expanding RON approvals to 44 states.
Jake Fingert, general partner of Camber Creek, said that while the pandemic has forced nearly every business to digitize overnight, five-year-old Notarize is ahead of the game.
“Notarize identified the need to simplify the inconvenient and arduous process of notarization years ago and diligently built the technology, partner and legislative framework to make RON a reality,” he said in a written statement.
