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, the venture capital fund set up by Skype founder Niklas Zennstrom, let the investment in the company. 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.
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, says in an emailed statement announcing today’s investment:
To receive this backing from Atomico is an awesome opportunity for LendInvest. Atomico is a rare example of a VC firm whose founder has first-hand experience of building a multi-billion dollar, fast growth technology company, and that was hugely attractive to us. We have only scratched the surface of how technology will make mortgages a better, faster and more transparent consumer experience for borrowers and investors.
LendInvest raised £22 million ($31.5 million) from Beijing Kunlun, a listed Chinese technology company, last year and the company says it has raised over £200 million ($287 million) in debt and equity to date.