Fronted, the new London-based startup aiming to make tenants’ lives easier, including lending the money needed for a deposit, has secured an upfront investment from Passion Capital. The investment was revealed in a recent regulatory dossier for the company.
The exact size of the check is not yet disclosed, but what we do know is that Passion Capital partner Eileen Burbidge has joined Fronted’s board of directors. This is not surprising, given that Fronted co-founder Simon Vans-Colina was an early and important employee of Monzo, the challenger bank that counts Passion Capital and Burbidge as original backers.
Confirming Passion Capital‘s investment, Fronted co-founder and CEO Jamie Campbell made the following statement to TechCrunch:
“Like many companies we have found our marks in the post-pandemic world, we are grateful to have supported investors like Passion Capital who have supported us from the start and who believe in our vision to help tenants to to relocate.”
The company, founded late last year by Campbell, Vans-Colina and Anthony Mann – former employees of Bud, Monzo, and Apple, respectively – plans to launch a fintech product later this year to help tenants to finance their rental deposits.
The fledgling company is currently participating in the FCA’s ‘sandbox’ scheme (run by the UK’s financial services regulator) to start lending money that can only be used for a security deposit.
By using open banking and other financial technologies, and by offering a credit product designed to fund deposits directly, Fronted believes it can lend less than existing options – such as credit cards, payday lenders, and credit cards. overdraft, or insurance-backed – and lower-risk membership programs.
At the end of last year, Campbell and Vans-Colina explained that tenants who request to use the Fronted service will be asked to link their bank using open banking, thereby sharing their recent transaction data and providing details of the property they wish to rent. Then, once Fronted has completed the required checks and agreed to provide credit, the startup will send the money directly to the estate agent to be placed in the UK deposit protection scheme, which means the loan never touches the tenant’s hands (or wallet).
Tenants then pay off the loan on a set schedule, or they can pay it back in full when they have the money to do so. There is also a planned “vacation mode” that will allow borrowers to temporarily reduce their monthly payments to avoid falling into financial difficulty.
Fronted halted operations as the coronavirus pandemic set in and at the height of uncertainty, but with the initial product built and the money in the bank, a launch doesn’t seem too far away.
“We are in the final phase [of regulatory approval] and once we’re cleared, we can pitch, ”adds Campbell.