Residential real estate wire fraud is on the rise. Fraudsters and hackers deploy increasingly sophisticated scamming attacks to divert home buyers’ funds into fake accounts, with little to no recourse for the homeowner. According to the FBI, nearly $500M in funds were stolen in 2023, 50x more than a decade ago, as cashier’s checks are being replaced by online money movement. Title and settlement companies report attempted attacks weekly, stating that “it’s reached the point of ‘when it will happen’ instead of ‘if it might happen.’” ClosingLock is on a mission to prevent such attacks.
We are excited to lead a $12M Series A in ClosingLock, a real estate wire fraud prevention and payments platform that enables independent title agencies and settlement companies to give their customers (homebuyers) a centralized and secure portal to complete transactions. ClosingLock started by offering a fraud prevention tool and has now expanded to include embedded pull-based payment functionality so a homebuyer can complete all of their legal and financial activities from the ClosingLock platform. ClosingLock’s portal provides these agencies with a simple, secure, and efficient place for the transfer of data and funds.
ClosingLock was founded in 2017 by Andy White and bootstrapped until the seed round led by LiveOak Venture Partners in 2022. LiveOak joins Headline in this current round. Andy and his team have impressed us by scaling consistently and expanding the product offering in a highly capital-efficient manner, even as the macro tailwinds in the residential real estate market slow. Their long-term vision is to provide a safe and reliable network for the transfer of data, payments, and communication between multiple parties in the broader real estate ecosystem (title, escrow, homebuyer, mortgage company). This will enable them to monetize the $2T annual flow of incoming and outgoing payments in residential real estate.
While fraud prevention is the initial wedge, we believe ClosingLock is on the path to creating a verticalized B2B payment network focused on residential real estate. We are thrilled to be partnering with Andy and the entire ClosingLock team to bring security and peace of mind to homeowners as they make life’s largest investment.