St. Louis startup that provides automation technology finds niche with mortgage lenders – St. Louis Business Journal
When David Karandish publicly launched artificial intelligence startup Capacity in June 2018, the startup had about 35 employees. Three years later, it now has a team of 87.
A key component of that growth: the mortgage industry. As the startup expands, Capacity has found a niche in providing its technology to mortgage lenders. The St. Louis startup earlier this month announced it has developed what it contends is an “industry-first support automation platform” designed to help mortgage lenders and their borrowers more easily close on real estate deals.
Founded in 2017 by Karandish and fellow entrepreneur Chris Sims, Capacity has developed an AI-enabled “help desk” technology that’s designed to capture and collect an organization’s information from various sources to automate support for employees or customers. It has raised $34 million in funding, including a $11 million Series C financing closed in 2020.
While Capacity has worked with mortgage lenders since its early days, Karandish said it has since built up a “critical mass” of 25-plus mortgage lenders that use its technology. Lenders using Capacity’s platform include Assurance Financial, AmeriSave Mortgage Corporation, PRMG and Flagstar Bank. Karandish said he believes the mortgage process, given the multitude of documents, regulations and communication involved in securing a loan, is “ripe” for improvements and efficiencies.
“We think there’s an opportunity to automate as much as possible and help bring a better experience,” said Karandish, CEO of Capacity.
For example, Capacity said its technology has the capability to answer more than 90% of questions posed by borrowers, and that it can automate back-end functions to accelerate the lending process. The startup says lenders who use its technology on average close their loans 11 days sooner than their peers.
Capacity’s growth in the mortgage sector comes as its revenue has grown, Karandish said. The startup does not disclose specific revenue figures, but Karandish said a little over half of Capacity’s revenue and client base comes from the financial services sector, with the mortgage industry accounting for a significant portion of that segment. In addition to financial services, Capacity also has client bases in higher education, health care and software.
Moving forward, Karandish said he expects Capacity to continue to improve its technology and add new tools to it. He’s also bullish on the future of the broader artificial intelligence software market, noting that a recent study finds it will be a $126 billion market by 2025, up from a projection of $60 million when he unveiled his startup in 2018.
“The biggest shift I’ve seen in the last 12 to 18 months is there’s a major FOMO (fear of missing out) for the companies that haven’t adopted this stuff. They’re quickly realizing that ‘if we don’t start adding support automation into our tech stack we are going to go the way of the dinosaur,’” Karandish said.
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