DepotPoint, which runs a foreclosure-information Web service, said it has raised $7 million in a second round of venture funding.
Talk about good timing.
DepotPoint was born in late 2005, as its founders sought to help buyers navigate the arcane market for real-estate foreclosures.
Now a national housing crash has put the spotlight on that market, and on Monday the Bellevue startup said it had raised $7 million in venture capital.
The growing opportunity has come as sort of a surprise for the company.
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“When we picked this foreclosure segment, we didn’t expect we’d be seeing such an increase in foreclosure rates countrywide,” said Chief Executive Prakash Kondepudi.
The company’s second round of financing, led by Kirkland-based OVP Venture Partners, will be used to bankroll growth in a booming market. Existing investor Trident Capital also participated in the round, which brings total venture funding to $11 million.
DepotPoint’s services are two-pronged. It offers brokers and mortgage-servicing firms software to streamline the process of dealing with foreclosed property.
It also has a Web service, ForeclosurePoint.com, that allows potential buyers to scan an area for foreclosed properties. This service is free, but more detailed information costs $79.95 a month.
After testing the site in Seattle and the California and Arizona markets, the company rolled out the service on a national scale last month.
Unless interested buyers are able to understand how to find and buy foreclosed properties, “we don’t see there’s an end to the housing-market slump,” Kondepudi said. “We have to clear these distressed properties … they dampen housing prices.”
The explosion in the number of foreclosed properties has also strained the resources of real-estate agents, brokers and banks dealing in the sector, due to the large amount of paperwork required.
“With the sudden increase of volume, they don’t know how to handle these things,” said Kondepudi, who claims his company’s software can allow a staffer to handle 200 to 300 filings a month, up from 45 to 50.
Speedier processing and more information for buyers could eventually help foreclosed houses move faster. Having “more and more people sitting on the sidelines is going to hurt us more,” Kondepudi said.
Ángel González: 206-515-5644 or firstname.lastname@example.org