Doma, a title insurance company, announced on 2nd March 2021 that it would go public to change the face of the market. Formerly known as States Title, this company has made a merger agreement with Capitol Investment Corp. V, a special purpose acquisition company (SPAC).
The merger valued at $3 billion, including debt, plays a significant role in Doma going public on the New York Stock Exchange. This is the fifth SPAC merger for Capitol Investment Corp. V company. Currently, Doma has less than 1% share in the title insurance market in the US, but they are projecting it to reach 5% by the end of 2023. Lennar, one of the biggest homebuilders in the nation, backs this company.
In 2016, Doma was founded to underwrite title insurance instantly. After that, the company has made expansion in various areas of closing and escrow. Doma states that it can process title insurance around one minute, which historically took up to five days. Since its inception, the company has been able to facilitate over 800,000 real estate closings. Doma has worked with lenders like Sierra Pacific Mortgage, PennyMac, Chase Bank and Homepoint, among others.
They are using patented machine learning technology to replace antiquated residential closing processes of real estate. With that, Doma accelerates the title insurance and closing timelines to help lenders, real estate agents, and title insurance professionals in cost-saving.
The transaction as per this merger is expected to give up to $645 million in cash proceeds, $300 million of fully committed private investment in public equity (PIPE), and up to $345 million cash held in the trust account of Capitol Investment Corp. V. In its filings to the US Securities and Exchange Commission (SEC), Doma mentioned $179.8 million retained revenue in 2019 which grew to $189.7 million in 2020. The company expects $226.7 million of retained revenue in 2021 as per Generally Accepted Accounting Principles (GAAP). They are expecting to lose $103 million in 2021 in comparison to losing $35 million a year prior. Doma categorically mentions that they expect to take a couple of years to profit from their title insurance business.