Cincinnati-based DotLoop is trying to eliminate the necessity for hard copy transaction documents, first in the real estate industry and eventually in any industry that relies on lots of paper. Today the company is announcing $7 million in Series A funding from Trinity Ventures, and will use the funding to open a new office in San Francisco and add to the team. As part of today’s funding announcement, the company is also debuting DotLoop-NOW, a free version of their platform that allows individual agents to use the tool, rather than requiring real estate brokerages to subscribe to the enterprise-level platform.
DotLoop CEO Austin Allison first became frustrated with the process of printing, faxing, notarizing, and e-signing a variety of documents during the purchase of his first home. “I was about 15 minutes into that transaction from the buyer’s perspective and I recognized that the process was just incredibly antiquated and inefficient, and the inefficiencies were around the paperwork,” he said in an interview.
Allison later got his real estate license, and it was after selling properties during college that he experienced those frustrations from an agent’s perspective, even though he had found online form, signature and document management tools to help with the process. “I realized during that process that there was no single solution that had solved that problem. The problem was not creating a form or signing a document, the problem was the paperwork itself,” Allison said, citing the fact that paperwork had to go back and forth multiple times between all involved parties as the main issue.
Allison launched DotLoop in 2009 to help real estate agents, buyers and sellers complete transactions online, from offer to close. Real estate agents create a “loop,” a virtual workspace where buyers and sellers are given access to transaction documents. All involved parties are able to e-sign and share transaction documents, and DotLoop’s online negotiation service lets buyers and sellers add to and adjust documents before approving and signing them. All document adjustments are tracked and timestamped in real-time, similar to how Google Docs updates dynamically and shows edits from multiple people at once.
DotLoop operates on a subscription basis, so enterprise-level clients like real estate brokerages pay between $8 to $20 per person per month for access to the platform, and get access to an administrative portal with risk mitigation and compliance tools. There’s also a freemium model that allows individual agents who are part of an enterprise account to upgrade to the premium functionality for $20 per month. DotLoop-NOW means that individual agents can sign up without their brokerage having an enterprise-level account. Allison emphasized that there is no fee per transaction, and no cap to the amount of transactions one user can process. He also said that while DotLoop now allows anyone to sign up and create a loop for free, they’re not trying to replace real estate agents, rather supplement what they’re already doing.
There are currently over 200,000 individual real estate agents using the service in over 700 cities in the U.S. and Canada, with over six million buyers and sellers using it since it launched in 2009. Right now the site services real estate professionals in the U.S. and Canada, and though Allison said they plan to expand internationally, it won’t be in the next year. Along with international expansion, they also plan to expand to other industries, but again aren’t planning to do so in the next 12 months.
“Beyond real estate, we believe that this is a problem that hasn’t really been solved in the world for transactions like real estate where there’s two or more people and lots of repetitions and negotiations in the process,” he said. “Our vision is much bigger than real estate, and we plan on eliminating paperwork in general for all those transactions.”
While there real-time document editing tools like Google Docs, document-storage tools like Dropbox, and form creation/e-sign tools, DotLoop is attempting to provide a much more comprehensive tool. Allison said that while they compete with each of those piecemeal solutions, their biggest competitor is paper. “Our biggest competitor is the status quo, and that today is point solutions and existing systems,” he said. “If there isn’t a solution for a particular problem, people will attempt to solve that problem by piecing together point solutions.”