Monzo Co-Founders back Fronted in £1m fundraise.
LONDON, 10 MAY 2021.
Fronted–The rental deposit lending business–has raised over £1million in a debt and equity deal, increasing their total funding amount to £2million.
Two notable round participants are the co-founders of Monzo, Paul Rippon and Gary Dolman, who were the Co-CEO and CFO at the UK-based challenger bank. Other distinguished investors include Baroness Kingsmill–former Chairperson at Monzo, Ville Vesterinen and Ling Lin.
The money raised will enable Fronted to grow its deposit loan business as well as establish strategic partnerships for the renter-focussed lender. Co-Founder Jamie Campbell said in a statement:
“We are delighted to get the backing of over 20 remarkable investors, to grow the business. This investment is the result of a year of huge effort from the whole team. We will use the money to create greater access to Fronted; partnering with platforms that will offer Fronted as a deposit payment option.”
Gary Dolman, previously of Monzo Bank, and now a venture investor at Antler VC, has joined Fronted’s advisory board:
“Fronted’s offering is highly differentiated and equally attractive to their customers and to me as an investor. Their focus, business model and prospects are exciting and I am delighted to join Fronted’s advisory board.”
Paul Rippon, previously of Monzo Bank, and now Chairman at GBB, commented:
“Home is where the heart is and I know as a landlord and former tenant that deposits can be difficult to pull together. That real problem needs solving and the Fronted team are doing that in a caring way using interesting modern technology. I’m delighted to be an investor and be part of their journey.”
Fronted is going up against the deposit alternatives which use an insurance-based model to remove the cash deposit entirely, meaning customers don’t have a deposit protected in a Deposit Protection Scheme. Fronted aims to solve the same problem, but allowing a customer to pay their deposit over 12 months, not all up front. Jamie continued:
“A lot of renters don’t move because they don’t have money saved up. The alternatives in the market have shown that there is a market for deposit help, but we believe the insurance model doesn’t protect tenants and is prone to miss-selling. It is also expensive. For customers bridging between deposits and moving multiple times the fees stack up.”
Fronted, regulated by the FCA with a consumer lending authorisation, launched in February 2021. The firm boasts no early repayment fees for customers who want to settle the deposit loan early and no hard credit checks for anyone who applies. Their offering is substantially more cost-effective than the rental-deposit alternatives, currently available in the market.