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RealKey

Automated Mortgage Processing/Underwriting B2B SaaS Platform

USA, California
Market: Real estate, Financial services, Other
Stage of the project: Operating business

Date of last change: 13.03.2024
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Idea

Loan Processing/Underwriting Automation Platform Utilizing AI/ML and APIs/OCR to collect/review data/documents for all parties involved in approving and funding a home loan transaction.

Current Status

• $4.5mm ARR, 50% YoY Growth, and less than 3% Churn.
• Google Accelerator AI/ML Cohort Top of Class (only Fintech company chosen to participate)
• Late stage (pending vendor diligence unlocked by capital from current round) with numerous top tier banks, lenders, and brokers ($2mm+ contract value).

Market

There are 650k active Mortgage Loan Originators (MLOs) in the US (+25% supporting staff) and ~10mm transactions processed yearly over the past decade. RealKey will evolve to support other participants in the ecosystem, such as real estate agents, insurance, and title/escrow. RealKey is solving for the most complex loan consumers can obtain. RealKey will expand to support student/auto/personal loans, as well as wealth management/financial planning, and eventually plans to go consumer direct.

Problem or Opportunity

Today, lenders receive unsupported and incomplete applications through Points of Sale or by phone from borrowers. The MLO runs that data through Automated Underwriting Systems to get worthless feedback and request basic documentation (often the same documents twice), resulting in tons of back and forth with underwriting. Their internal systems provide no facilitation on what to gather and when. These gaps lead to drastic reductions in NPS scores.

Solution (product or service)

RealKey is an Automated Loan Processing (ALP) platform automating document collection & review to reduce conditions, touches, and time-to-close with underwriting. RealKey's Intelligent Conditions Engine utilizes 100% of 3.4 MISMO fields to auto-generate the industry's most comprehensive needs list for all parties with standardized and shareable content, including lender and loan program specific requirements. OCR and AI/ML are leveraged to automate classify, parse, and map data from uploaded documents for automated review and conditioning, leading to a more efficient closing.

Competitors

RealKey fills the gaps of current industry systems: LOS (Ellie Mae, Calyx), POS (Blend, Rocket Mortgage), AUSs, and current manual processes. RealKey is the only platform taking a documents first approach to automate processing and underwriting to get all the right documents upfront through integrations, OCR, and automated rules/algorithms to facilitate documentation collection and review. Making all potential suitors.

Advantages or differentiators

RealKey has a durable advantage. Our CEO's background as the top Mortgage Originator in the US has been built into the logic of the system to help qualify more people through a unique decision tree and streamline interaction with all parties. UI designed by the former TurboTax Design Lead are patented and proven to decrease churn and improve adoption. RealKey is the only company unifying all parties into a centralized and neutral platform. Key endorsements further our advantage.

In Summary:
1st Mover Advantage, Strategic Investors/Endorsements, Network Effect, Improved Efficiency Over Time, Increasing Cost to Switch Over Time, Filling Gaps in Current Products, Unparalleled Domain Knowledge w/ World Class Leadership Team

Finance

RealKey currently charges a monthly fee of $99/Mortgage professional (sales, processing, underwriting, and management). Future features allow for a $35-70/transaction fee to mortgage loan originators. The average MLO closes 36 transactions/year. Tiered pricing entices enterprise clients to add more users, and a discount is provided to powers users. Fees are charged for integrations (Title/Escrow, Insurance, etc.), as well as pay per click for leadgen to these parties. Future evolution includes leadgen for untethered consumers.
3-Year Revenue Forecast:
2020: $875k
2021: $1.2m
2022: $2.9m
2023: $4.2m
2024: $12m
2025: $23m

Business model

RealKey currently charges a monthly fee of $99/Mortgage professional (sales, processing, underwriting, and management). Future features allow for a $35-70/transaction fee to mortgage loan originators. The average MLO closes 36 transactions/year. Tiered pricing entices enterprise clients to add more users, and a discount is provided to powers users. Fees are charged for integrations (Title/Escrow, Insurance, etc.), as well as pay per click for leadgen to these parties. Future evolution includes leadgen for untethered consumers.

Money will be spent on

Development/Design - 40%
Marketing/Business Development - 35%
Legal/Operations - 15%

Offer for investor

$10m Round
$100k min. Investment
$2m Cash-in-Hand (Diligence shareable)
$33m Pre-Money Valuation

Team or Management

Risks

Maintaining company culture, losing focus or improper prioritization of resources for features our clients don't want, external or internal hacks (security), or lack of capital.

Incubation/Acceleration programs accomplishment

Batchery - Completed 2016
NAR REach - Completed 2018
Mass Challenge - Completed 2020 (Won 1st Prize - $100k Diamond)
Flagstar Bank Accelerator - Completed 2021
Google Accelerator (AI/ML Cohort) - Completed late 2023

Won the competition and other awards

• Flagstar Accelerator Inductee (6th Largest Mortgage Lender in US)
• NAR REach/Second Century Ventures 2018 Graduate (included $100k investment)
• Realogy FWD Tech Summit Finalist (2018)
• Inman Innovator Award Finalist 2018 (Most Innovative Company)
• Digital Mortgage Conference Best in Show
• Banking Disrupted Summit Winner (Most Disruptive Fintech Company)

Invention/Patent

Patents filed Globally for Interfaces, LiveSync Feature, Decision Tree, and BizModel

Photos

Photo 1 - Automated Mortgage Processing/Underwriting B2B SaaS Platform
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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video
Presentation