Proptech Neolender Proportunity Raises $150M Funding
The Rise of Neolenders: Proportunity Secures $150 Million Funding
Alongside the growing popularity of neobanks, a new financial category is emerging: the neolender. Proportunity, a London-based company, exemplifies this trend.
The company has recently completed a funding round totaling $150 million, comprised of $7 million in equity and $143 million in debt financing. This follows a previous $10 million debt round secured in 2020.
Funding Details and Future Plans
This latest investment round was spearheaded by VentureFriends, Kibo Ventures, and existing investors including Anthemis and Entrepreneur First. Additionally, new U.K. property technology investors, Amro Partners, participated.
Proportunity intends to utilize these funds to expand its team and significantly increase the maximum loan amount available to homebuyers. The maximum loan size will be raised from £90,000 to £150,000 per property.
Addressing Homeownership Challenges in the U.K.
A substantial 85% of renters in the United Kingdom aspire to own a home, but are often hindered by substantial deposit requirements and escalating property values.
Proportunity offers a solution through a home purchase equity loan. This functions similarly to the U.K. government’s “Help to Buy” scheme, but extends its availability to all properties, not solely new constructions.
How Proportunity's Equity Loan Works
The equity loan allows prospective homeowners to purchase properties with as little as a 5% deposit, thereby lessening the savings burden.
This loan, reaching up to £150,000 or 25% of the property's price, is provided in conjunction with a conventional mortgage from a mainstream lender.
Combined with a mortgage of up to 4.5 times the borrower’s income, this approach effectively enables individuals to borrow up to six times their annual income.
The company leverages machine learning to identify fairly priced homes in areas poised for growth, mitigating lending risks and reducing the necessity for large upfront deposits.
Statements from Leadership
Vadim Toader, CEO and co-founder of Proportunity, commented on the company’s vision.
George Dimopoulos, a partner at VentureFriends, stated: “In Proportunity we saw a product that can positively impact the lives of thousands of First Home Buyers (FHBs).”
Competitive Landscape
Proportunity operates within a growing market, facing competition from several key players.
- Generation Home: This company offers a modern approach to guarantor mortgages, primarily facilitating financial assistance from family and friends.
- Wayhome (aka Unmortgage): This provider presents a private alternative to shared ownership, combining elements of renting and mortgage deposits.
