States Title, now Doma, going public in $3B SPAC deal

Deal to take title insurance startup public will generate $645M in cash

States Title CEO Max Simkoff and investor Mark Ein. (Keystone Strategy, Getty)
States Title CEO Max Simkoff and investor Mark Ein. (Keystone Strategy, Getty)

Title insurance startup States Title is going public in a $3 billion deal with a blank-check firm, the latest sign of investor interest in companies that digitize the residential real estate industry.

The company — which has been renamed Doma — said Tuesday that it plans to merge with Capitol Investment Corp., a special purpose acquisitions company backed by investor Mark Ein. Since 2007, Ein has raised $1.5 billion through five SPACs.

The deal will generate $645 million, including a $300 million PIPE investment and $350 million from investors including BlackRock, Fidelity, the Gores Group, Hedosophia, SoftBank’s SB Management, Wells Capital and Zillow co-founder Spencer Rascoff. National homebuilding giant Lennar, already a big investor in States Title, is participating in the PIPE.

Doma will retain up to $510 million in cash proceeds, the companies said.

Founded in 2016, States Title took on the arcane world of title insurance by digitizing and streamlining the closing process. The company was last valued at $623 million after a $123 million funding round in May 2020 led by Greenspring Associates with participation from Foundation Capital and Fifth Wall Ventures.

Last month, States Title raised $150 million in debt financing from HSCM Bermuda.

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The deal reflects both the liquidity available in the financial markets, which has resulted in the proliferation of real estate-focused SPACs, as well as the strength of the U.S. housing market, with January home sales up 23.7 percent year-over-year, according to the National Association of Realtors. With it, demand for digital tools to buy and sell homes has also surged.

“In 2020, adoption and usage of our core product exceeded our expectations,” founder and CEO Max Simkoff said in a statement.

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To date, Doma has facilitated 800,000 closings for lenders including Chase, Homepoint, PennyMac and Sierra Pacific Mortgage.

After the Series C last year, Simkoff summed up his experience with the title insurance industry thus: “First they ignore you, then they laugh at you, then they fight you.”

“I’ve been told often that I speak ignorantly in this industry,” he said in a conversation with The Real Deal at the time. “Then it turns out the ignorant things I’m saying end up becoming more efficient ways of doing things.”