Walker & Dunlop Continues Tech Expansion With TapCap Acquisition
Commercial real estate financier Walker & Dunlop (W&D) has continued its recent campaign of M&A activity with its purchase of financial technology company, TapCap, W&D announced today.
Over the last 18 months, W&D has made a series of moves to expand its traditional commercial real estate finance capabilities, while separately acquiring or partnering with financial technology companies to help automate and streamline its internal processes.
The addition of TapCap marks yet another move in the firm’s five-year growth strategy, this time to help further automate loan application and origination through a proprietary software that provides real-time quotes for multifamily loans, with the goal of making the borrower’s experience easier and more transparent. The purchase is seen as a move to help it reach its ambitious goals in small balance loan origination.
“We’ve been investing heavily this year in loan origination talent to scale our small loan originations to $5 billion by 2025,” said Alison Williams, who serves as W&D’s small balance lending chief production officer. “But, penetrating the small balance lending market requires cutting-edge technology to reduce costs, while providing an exceptional customer experience. Adding TapCap’s technology will make our lending processes more transparent, efficient, and scalable — and accelerate our growth towards $5 billion.”
TapCap founder and CEO Zac Rosenberg broke away from his family’s company, Greystone, about two years ago to launch the fintech startup. He had spent the previous four years as a director, leading the buildout of different online underwriting and origination tools in Greystone Labs, the firm’s tech innovation division. Rosenberg will stay on in a leadership position within W&D’s technology group.
“TapCap is all about efficiency, and how to remove friction from the borrower experience, while reducing underwriting and closing costs on loans,” said W&D Chief Technology Officer Aaron Perlis.
This addition just adds to W&D’s recent efforts to expand its artificial intelligence and machine-learning prowess in the areas of valuation, underwriting and origination. Two years ago, W&D acquired Enodo, a business-to-consumer software company that specializes in using AI and machine learning in underwriting. And, in January 2020, it partnered with tech company GeoPhy to launch a system called Apprise, which aims to streamline multifamily valuations.
Perlis said that the “acquisition of Enodo in 2019 and our joint venture with GeoPhy have driven [our] AI and machine-learning capabilities to new levels, resulting in dramatic growth in new customers.”
W&D has also been expanding elsewhere within the company. The same month it partnered with GeoPhy, it created a New York City-based capital debt and equity capital markets division with its acquisition of AKS Capital Partners. And, last month, it bought housing research and advisory firm Zelman & Associates.