LendInvest raises funding
LendInvest, a peer-to-peer short-term mortgage finance platform, has raised £17 million ($24.4 million) from venture capital firm Atomico, the second big investment into the so-called "PropTech" sector in as many weeks.
LendInvest announced the Series B funding round on Monday. The company, which traces it roots back to 2008, lets institutional investors and ordinary savers finance short-term mortgages, where people buy houses that need work, repair them, then quickly sell them on for profit. All loans are secured against the property being bought and the platform offers returns of over 5% per year.
£560 million ($803 million) has been lent over the platform to finance 2,100 properties and LendInvest now makes up over 10% of the short-term mortgage market in the UK.
30% of LendInvest's mortgage financing comes from retail investors who put in as little as £100 ($143), while the rest comes from LendInvest's two real estate investment funds (popular with institutional investments), and three large, unnamed banks that invest over the platform.
Atomico's investment comes amid a flurry of investment in "PropTech" — property technology. Companies like LendInvest are trying to bring technology to the property market, bringing much of it online and bringing elements of fintech to property investment.
London-based Property Partner, which lets people buy a chunk of a rental property over its online platform, last week raised £16 million ($22.9 million) from leading venture capital fund Index Ventures. Online property portal Zoopla also recently invested in four "PropTech" startups.
Christian Faes, co-founder & CEO of LendInvest, told Business Insider: "I think everyone is just starting to wake up to it to be honest. The property market is so backward, it’s so offline other than say Zoopla and the online agencies. It’s ripe for disruption."
LendInvest raised £22 million ($31.5 million) from Beijing Kunlun, a listed Chinese technology company, last year but Faes says the company has not spent any of that yet.
Faes said the new money "will be spent," though, saying: "It’s a huge opportunity to disrupt the mortgage market and we feel we’re quite well positioned to do that, but it is going to take significant spend. This just continues to beef up our balance sheet and give us quite significant firepower to grow the business.
"We ran a process, we retained GP Bullhound to explore opportunities within the market. We thought Atomico’s a really good fit for us. The thing with Niklas Zennstrom is, Atomico’s one of the few VC outfits that has a principle or has been founded by someone who has done it themselves."
LendInvest's fresh funds will go towards hiring its first over Senior VP of engineering and building out LendInvest's tech team, which currently numbers 20.
The company wants to expand into new areas of the mortgage market, with Faes saying: "We’d like to be in the buy-to-let space by the end of this year, which would be a significant move. From there, the whole of the mortgage market is probably a few years out."
Mattias Ljungman, a partner at Atomico who is joining LendInvest's board as part of the deal, says in an emailed statement:
"London is a global leader in fintech, raising almost $1 billion in VC funding in 2015 alone. LendInvest is a great example of what can be achieved through fintech technology, opening up the world of lending and mortgages to a new generation of tech-savvy consumers.
We're impressed with Christian and Ian's vision and ambition to disrupt the established lending industry. Their lending and borrowing marketplace is bringing speed, efficiency, and transparency to a traditionally cumbersome process. We're excited about working with the team to ensure that their great product is underpinned by the best technology, and to take their business to the next level".
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