Passion Capital has backed Fronted, the startup that wants to offers loans to cover rent deposits
Fronted, the new London-based startup aiming to make life easier for renters, including lending the cash needed for a deposit, has picked up seed investment from Passion Capital. The investment showed up in a recent regulatory filing for the company.
The exact cheque size isn’t yet disclosed, but what we do know is that Passion Capital partner Eileen Burbidge has joined Fronted’s board. That’s unsurprising, given that Fronted co-founder Simon Vans-Colina was an early and important employee of Monzo, the challenger back of which Passion Capital and Burbidge are original backers.
Confirming Passion Capital’s investment, Fronted co-founder and CEO Jamie have TechCrunch the following statement:
“Like a lot of businesses we have been finding our feet in post-pandemic world, we are grateful to have supporting investors like Passion Capital who have supported us from the very beginning and who believe in our vision to help renters move”.
The company, founded late last year by Campbell, Vans-Colina and Anthony Mann — former employees at Bud, Monzo and Apple, respectively — is planning to launch later this year with a fintech product to help renters finance their rental deposits.
The nascent company is currently in the FCA “sandbox” program (run by the U.K. financial services regulator) to begin lending cash that can only be used for a rental deposit.
By using open banking and other financial technology, and offering a credit product designed to finance deposits directly, Fronted believes it can lend more cheaply than existing options — such as credit cards, pay-day lenders and overdrafts, or insurance-backed membership schemes — and at lower risk.
Late last year, Campbell and Vans-Colina explained that renters that apply to use the Fronted service will be asked to link their bank using open banking, therefore sharing their recent transaction data, and provide details of the property they wish to rent. Then, once Fronted has run the required checks and agreed to provide credit, the startup will send the money directly to the estate agent to be placed in the U.K.’s Deposit Protection Scheme, meaning that the loan never touches the renter’s hands (or wallet).
Renters will then pay back the loan over a set schedule, or they can pay it off entirely when they have the money to do so. There is also a planned “holiday mode” that will allow borrowers to temporarily reduce their monthly payments in order to help avoid falling into financial difficulty.
Fronted paused operations as the coronavirus pandemic took hold and at the height of uncertainty, but with the initial product built and money in the bank, a launch doesn’t look too far off.
“We are in the final stage [of regulatory approval] and once we are authorised we can launch,” adds Campbell.