Rental platform Fronted has revealed it has raised more than £20 million (US$ 26.65 million) to continue the development of an app that provides a ‘lifetime deposit’ in the British real estate market.
Revealing the news, co-founder Jamie Campbell explained how Fronted provides a rental deposit that moves home with each customer. it works by securing the return of a renter’s old deposit to Fronted and financing the new deposit in full. Users have 10 weeks to pay off the bridging finance. All – or a portion of it – will come from the return of the old deposit.
Campbell wrote: “We think asking renters to come up with another five weeks’ rent when they already have money protected is ludicrous. Renters should be allowed to pay a new deposit with the one they already have.”
He said that when a renter moves between properties, there is almost always the need to pay two deposits. The landlord who owns the ‘moving in property’ wants a deposit paid as soon as possible to reduce the risk of an empty home. The ‘exiting property’ landlord wants the money to be available for any deductions after the tenant moves out.
The company said that on average, rental deposits in the United Kingdom are £1,300 (US$1,730) , and renters have a double deposit overlap of 35 days.
Fansanara Capital led the latest investment.
Francesco Filia, its Chief Executive Officer, said: “We are delighted to back yet another innovative fintech that is solving a real pain point for consumers.”
“The innovation that Fronted brings to the rental market can benefit all participants from renter to real estate agent to landlord, helping remove a key friction and reducing risk.”
The Fronted app and the lifetime deposit will launch later this year with a small testing cohort. It will roll out across England and Wales during 2022.