If you’ve ever had to apply for a mortgage, you know that it can be a time-consuming, expensive and often painful process — both in terms of just filling out the application and then waiting for the transaction to close.
In recent years, a number of digital lenders have emerged to bring more technology to the process with the goal of making it all less tedious and slow. What we have seen less of are startups building the digital infrastructure to help these lenders deliver on a mortgage much faster than has historically been possible.
Enter Staircase. The Philadelphia-based startup has developed an application programming interface (better known as an API) that aims to bring together the various parties involved in the mortgage origination process. By integrating all these different parties, Staircase is pledging to provide a better — and significantly faster — experience for the borrowers and the companies that are providing the mortgages.
“The sheer number of entities and systems that must share and validate data to originate a loan makes it a complicated transaction. The lack of a universal language among all of these systems makes it even more difficult,” Staircase CEO and co-founder Adam Kalamchi. “What we are doing is creating an integration orchestration layer that brings all of those parties together and makes all these new mortgage-related technologies available instantly.”
Let’s look at some numbers.
It currently takes an average of 45 days to obtain a mortgage loan, and according to a recent report by the Mortgage Bankers Association (MBA), total loan production expenses totaled an average of $9,140 per loan in the third quarter of 2021. Staircase says that its API can give every participant in the process a way to talk to one another “in just a few clicks” and thus, will bring down the time to get a mortgage to 10 days, and the cost to originate a loan to $1,000.
Kalamchi (a former proptech investor) and co-founder Soofi Safavi (who worked for years in application development at JPMorgan Chase) started Staircase when they realized “there was no clean set of API infrastructure that was purpose-built for mortgage.”
“Currently, there’s so many technologies out there that are amazing, but you have to integrate them one by one by one. And they’re all different,” Kalamchi told TechCrunch. “The thing we’re here to do is to make it better, faster and cheaper… Staircase is doing for the mortgage industry what AWS marketplace does for the enterprise. Like AWS, we want our product to stand on its own and be easy to integrate.”
It’s a lofty claim. But one that a number of investors are willing to take a bet on. Staircase has closed on $18 million in a Series A funding round led by Bessemer Ventures, bringing the company’s total raised since its early 2020 inception to $24 million. RRE Ventures, Avid Ventures, Clocktower Technology Ventures, MetaProp Ventures and Zigg Capital also put money in the round.
“As with many of our most successful developer platform investments at Bessemer and within the industry, the Staircase team has been doing the hard work to build a platform for developers that solves the most critical data, integration and workflow problems within the mortgage landscape,” said Charles Birnbaum, partner at Bessemer Venture Partners. “After getting to know Staircase since the company’s formation and working with early customers, we were excited to back them in this journey to help finally bring among the slowest movement segments of the financial services landscape into the cloud by making it easier to access modern solutions without completely replacing legacy systems.”
One interesting thing about Staircase’s APIs is that its founders claim it won’t just help digital lenders, it can also help a wide range of entities including government-sponsored enterprises like Fannie Mae and Freddie Mac, employment verification services, first-generation mortgage technology providers like Ellie Mae and Black Knight, mortgage insurers, retail banks and wholesale banks.
That too is appealing to Bessemer.
“There have been some great new products that have enabled the mortgage industry to begin to provide more digital experiences to their end customers over the past several years but no true platform like Staircase to tie it all together and work with both innovative, digital-first as well as legacy providers in order to automate more of the process and leverage the cloud in the same way that many other segments of consumer financial services have already been doing for quite some time,” Birnbaum told TechCrunch.
Looking ahead, Staircase plans to use its new capital in part toward hiring so it can continue developing its product. Out of 50 some employees, more than 40 are engineers.
“It’s just all about product development, and maturation, and then going into the market and making sure the technology is helping borrowers,” Kalamchi said.