Opendoor Acquires Proptech Firm’s Closing, Escrow Business

The reinvention of Opendoor will revolve in part around a dream to revolutionize the mortgage refinancing process.

The firm is acquiring the closing and escrow business of proptech firm Doma, CNBC reported. Terms of the transaction were not revealed, though 85 employees are set to make the shift from Doma to Opendoor as part of the deal.

The acquisition of the partial Doma business will allow Opendoor to incorporate Doma’s automotive processes into its own title and escrow business. Doma leans on artificial intelligence and machine learning to accelerate closings and make them cheaper.

Doma’s technology already received a stamp of approval from Fannie Mae, which piloted its use beginning in 2024 to decrease title insurance costs on refinancings. That program was recently extended through next year.

Doma reportedly sought a partner to scale its business, leading to the Opendoor transaction. Opendoor president Lucas Matheson described the deal as part of “the process of completely rebuilding and automating.”

In addition to speeding up and softening costs around title insurance, Doma also aims to automate processes such as opening an escrow account, paying off mortgages and paying transfer fees and taxes. Demand for its services outpaced its ability to close transactions, according to chief executive officer Max Simkoff, leading to the partial sale.

Opendoor reported that it narrowed adjusted net loss and adjusted EBITDA loss in the fourth quarter.

The firm increased its home acquisitions by 46 percent from the previous quarter, purchasing more than 1,700 homes, and ended the quarter holding more than 2,800 homes and $960 million in unrestricted cash.

It was the first earnings report under Kaz Nejatian, who took over as chief executive officer in mid-September. Executives pointed to the performance of homes bought in October as evidence of a successful pivot, though the company anticipates revenue to fall 10 percent and adjusted EBITDA loss to be in the low- to mid-$30 million range for the first soon-to-be concluded first quarter.

— Holden Walter-Warner