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Proptech neo-lender Proportunity raises $150M mixed debt and equity round

You’ve heard of Neo-banks. Meet the Neo-lender. One of the newest is London-based Proportunity. It’s now raised a $150m mixed debt and equity funding round ($7 million equity financing and $143 million in debt), on top of its $10m debt round in 2020.

The round was led by VentureFriends, Kibo Ventures, and existing investors Anthemis, Entrepreneur First as well as new UK proptech investors Amro Partners. The startup plans to use this funding to grow its team, as well as increase its maximum loan size from £90,000 up to £150,000 per home.

Some 85% of renters in the UK want to own their own home, but can’t because of high deposit requirements and rapidly rising house prices.

Proportunity says it provides home buyers with a home purchase equity loan, similar to the UK government’s ‘Help to Buy’ scheme, but available for any home not just new builds. It allows them to afford homes with only a 5% deposit, reducing the amount they need in savings. The Proportunity equity loan of up to £150,000 or 25% of the house price, sits on top of the maximum mortgage they get from a mainstream lender. The equity loan, in addition to the mortgage of up to 4.5x income, means they can effectively borrow up to six times their income.

The company says it can do this through its machine learning that helps identify fair valued homes in high potential growth areas, de-risking lending, and removing the need for a large deposit.

Vadim Toader, CEO and co-founder said: “In the UK there is a £100-200k gap between what buyers want and what they can afford, mainly caused by lenders restricting what they will lend to a maximum of 4.5x income and high deposit requirements. Combine this with growing house prices and the need for an extra bedroom in the new ‘work from home’ environment and it’s easy to see that buyers are facing a losing battle.”

VentureFriends partner, George Dimopoulos said: “In Proportunity we saw a product that can positively impact the lives of thousands of FHBs.”

Proportunity has three main competitors: Generation Home – a new spin on guarantor mortgages, which largely helps structure financial help from family/friends. Wayhome (a.k.a Unmortgage) offers a private version of shared ownership which combines renting with a mortgage desposit.

This post was originally published on this site

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