Title insurance startup Spruce raised $4.5 million in a Series A funding round from Bessemer Venture Partners, Omidyar Network, Third Prime Capital and other investors.
The company, founded by finance entrepreneurs Patrick Burns and Andrew Weisgall, claims to offer cheaper and faster title insurance by using new technology to research and process contracts.
In a special report last year, The Real Deal broke down how title insurance firms collude to keep prices, and their profits, high. Firms tend to compete by wining and dining clients rather than by offering cheaper prices. In 2014, the industry made a net profit of $800 million on $12.2 billion on revenue.
“Why haven’t these companies kept up with the times, and applied modern technology to their operations? Lack of incentive, of course,” Spruce’s founders wrote in a blog post Friday. [TechCrunch] — Konrad Putzier