With the mortgage landscape settling into this new rate environment, loan officers (“LOs”) have been faced with an ultimatum: leverage a bullet-proof technology stack to continue driving strong origination volume or struggle to stay afloat. The PeakSpan PropTech team sees next-gen CRM platforms with embedded sales and marketing automation as critical to this equation, and thus are excited to announce our role in leading Aidium’s (fka Daily AI) $19M Series A growth financing.

PeakSpan joins a visionary management team led by Spencer Dusebout on their mission to equip mortgage lenders with a one-stop shop for engaging, converting, closing, and nurturing borrowers during the home purchase and refinance journey. As the deal team continued to turn over stones in this space, it was fascinating to have a front row seat into Aidium’s differentiated focus on bringing product innovation and flexibility to a largely archaic vertical. The Company’s platform equips independent mortgage banks with novel functionality such as business intelligence / reporting, warehousing / data visualization, Kanban style pipeline management, and enterprise-grade permissioning to name a few. Aidium has recognized a distinct product market gap — coming to market with a dead simple UX and out-of-the-box integration connectivity with other integral mortgage lender systems (namely category-leading LOS and POS vendors) that deliver rapid time to value at the LO level. PeakSpan’s PropTech team believes that partnering with Aidium bridges a pernicious gap in the mortgage loan experience, allowing LOs to optimize their communication cadence, facilitate bespoke customer engagements, better understand the operational metrics in their business that matter, and to stay top of mind for prospective homebuyers without the need to scale headcount in a linear fashion.

CRMs have struggled historically in garnering organization-wide adoption while also facilitating seamless data interoperability across an LO’s existing systems of record. Ultimately, LOs are sales representatives, tasked to find prospective homebuyers who qualify for entering the underwriting funnel. Given this broker-centric role, there is dramatic pressure on consistent top of funnel velocity, thereby promoting a culture where LOs find what works and then subsequently do more of it to keep volume high. Consequently, various sales and marketing solutions have come into style episodically but have yet to produce an end-to-end experience for the individual user.

Each technology solution services a specific node in the mortgage transaction lifecycle and contributes to legacy bloated stacks and ineffective processes:

i) Lead conversion software offers LOs workflow automation to generate qualified opportunities, instantly engage said prospects and nurture longer term relationships.

ii) The lender’s point of sale (“POS”) platform is activated/used/needed after the prospective homebuyer is qualified for a loan application and moves into the next part of the chain. This category emerged in recent years to offer a slick customer-facing application portal to streamline document/information collection, speed up the underwriting process, and reduce overhead costs.

iii) The loan origination system (“LOS”) is the most critical component of this journey and represents the longest standing piece of technology in the equation. LOS vendors provide back-end fulfillment of the loan process including document management, pricing and eligibility, and compliance management.

iv) Mortgage CRM / pipeline management systems and post-close nurture vendors exist in the background to equip LOs with relational customer data and automation triggers to drive continued proactive engagement for future business.

An illustration of the mortgage technology stack and how it fits into the broader Residential PropTech landscape can be found below:

Mortgage / Mortgage Tech Market:

After a record boom of mortgage originations in 2020 / 2021, the U.S. mortgage market quickly declined in 2023 after:

i) Rapidly rising interest rates,

ii) Elevated home prices (which have failed to materially decline despite the climb in interest rates), and

iii) An inflationary environment that has cut into the purchasing power of potential homebuyers.

These trends have led to a decline in new home loan origination, which reached historic lows in 2023. On the back of unprecedented activity in 2021, the drop in 2022 volume ($2.75 trillion) and continued downward spiral in 2023 ($1.1 trillion) left many businesses struggling to stay afloat, exposing the impacts of over hiring (particularly within G&A and other salary-based FTEs) that trickled over from 2021 highs despite the stark revenue contraction.

That being said, sentiment started to swing back towards optimistic throughout 2023 with the NAHB Housing market Index recently rising above 50 for the first time since July 2023. The NAHB noted that a pernicious lack of inventory and stronger demand for existing home sales (on the back of cooling inflation) continue to drive buyers off the sidelines and back into the market.

For technology intermediaries in this space, it was quite the “white-knuckle” ride to observe how the FTC handled the $11.9B acquisition of Black Knight (NYSE: BK) by Intercontinental Exchange (NYSE: ICE). After delaying the transaction on the ground that ICE would have anti-competitive control over the mortgage data market, officials withdrew their opposition to the deal after Black Knight divested of their Optimal Blue and Empower LOS products to Constellation Software Inc. (TSX: CSU).

Market Tailwinds:

With largely partner-driven initial sales (via real estate agents), followed typically by years of inactivity prior to another home purchase or refinance, LOs maintain unique engagement patterns compared to traditional sales organizations. This unique customer journey mandates an atypical engagement strategy, anchored in high-volume top of the funnel touchpoints and consistent nurture throughout the pre-application and post-close phases for facilitating a differentiated borrower experience.

And to add to the category nuance, the loan officer/lending teams often operate as quasi-independent divisions inside of broader organizations, relying on their own rolodex/engagement SOPs and moving between firms rather frequently. Amidst this backdrop, the need for a tailor-made and powerful CRM system is evident. Yet historically this has been challenging because:

i) LO processes have been in place for years and are proven to get the job done

ii) LOs do not always receive formal training, resources, and support from their employers to maximize value out of these systems, and

iii) The historical options at the hands of LOs represent rigid, highly feature-rich, and complex platforms that present friction in distributing marketing drip campaigns and customized content for seemingly bespoke interactions.

There are a few point solutions that have come to market with a solution exclusively catered towards lead management, nurture, and conversion, however, these folks lack the relational database component that is critical for having a granular view of a lender’s current, past, and future pipeline. PeakSpan feels strongly about Aidium’s ability to gain traction in this segment amidst the following market drivers precipitating a fruitful market opportunity:

1. Increased Investment from Mortgage Lenders in Technology / Digitization:

a. McKinsey & Company found that nearly 80% of mortgage lenders plan on increasing their annual spend on technology in the next 5 years and that most of the focus to date has been channel towards the front end of the value chain (e.g., POS) with ample room for automation on back-end workflows

b. 70% of mortgage lenders surveyed by ICE Mortgage Technology cited that technology-enablement reduced time to close originations

2. Transitioning Demographic of LOs:

a. There is a new era of emerging LOs trying to build repeatable and scalable client engagement strategies who recognize that getting homebuyers to the closing table requires streamlined communication workflows across every constituent group within the loan process

b. Not only do technology lifts have huge time saving efficiencies for this new transitioning LO demographic, but has the trickle-down effect on retaining top LO talent who flock to organizations with the software infrastructure to enable their success

3. Transition Demographic of Home Buyers:

a. McKinsey & Company has alluded to changing borrower expectations for digital engagements has risen drastically (30–40% customer-satisfaction score difference between mortgage and best-in-class industries)

b. Borrowers care most about time to approval, prompting the need for an integrated CRM tool to allow LOs to follow up with customers on the right action items in real time

Below is PeakSpan’s Thesis for Aidium:

As origination volumes return to a healthy level, LOs will be quick to turn towards their CRM systems to automate mission-critical communications with prospects as well as consistently drip feed relevant content to stay front of mind for future mandates. Aidium takes a differentiated approach to driving viral adoption at the LO level through a few key avenues:

1. Complexity Removal: Consolidates systems of record into a central hub of loan origination data

2. Dead-Simple UI/UX: No-code workflow automation w/ pre-built content and reporting templates

3. Product Differentiation: Equips LOs with innovative communication channels to engage with homebuyers at their preferred point of contact

4. Visible ROI via Tech Enabled Pipeline Management: Quantifiable relationship between platform costs and additional originations sourced versus incumbent solutions (see below!)

5. Maniacal Focus on Customer Support: Incumbency lack a concerted focus on rapid time to value and LO success

6. Plug-and-Play Platform Experience: Cost and time-efficient onboarding that can seamlessly integrate with existing stacks

With continued execution of strategic product roadmap initiatives, blue chip enterprise GTM momentum, and attraction/buy-in of industry luminaries, Aidium’s trail map has a clear path to the summit. The team sitting at base camp has diligently begun to capitalize on the low-hanging fruit in this landscape, while not losing site of their north star: equipping mortgage lenders with next-gen top of funnel business intelligence, automating tactical pipeline management, and driving ongoing expense and time savings. PeakSpan is humbled to be leading the first round of institutional capital into an emerging leader primed to scale to the peak of category dominance.