Proportunity secures £108.47 million Series A & Debt investment led by VentureFriends

The FinTech neo-lender offers up to £150K equity loans to home buyers with a small deposit, allowing them to buy the home they love, years earlier.  Proportunity plans to use this funding to grow its team and help buyers own $1 Billion worth of homes.  This new funding increases Proportunity’s maximum loan size from £90,000 up to £150,000 per home, boosting their buyers’ affordability even more and helping them buy homes they actually love.

Following a hot streak in the housing market, London-based neo-lender Proportunity, raised $150m funding through a mixed debt and equity round, on top of its recent $10m debt round in 2020. The finance has been raised with the key objective of helping more home buyers to get onto the housing ladder in a market where buyers are struggling to save up enough to afford a home, with incomes staying flat and house prices on the rise.

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 which are squeezing affordability for those trying to get on the housing ladder. In 2020, 65% of first-home buyers (FHBs) cited deposits and affordability as the main roadblocks. There are limited solutions available; banks lend up to a maximum of 4.5 times income and demand large deposits to mitigate house price risk. They are deterred from low-deposit lending by regulations and capital requirements, all of which Covid-19 has made worse. Help to Buy, the government scheme that provides a solution to new-build buyers,  only serves 10% of FHBs and is set to end in April 2023. 

Proportunity provides home buyers with a home purchase equity loan, similar to Help to Buy, 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, enables buyers to effectively borrow up to six times income, closing the £150,000 gap between what borrowers love and what they can afford. The company can do this through its machine learning technology that helps identify fair valued homes in high potential growth areas, de-risking lending and removing the need for a large deposit. 

Evidence of success are returns which are 50% better per year than the house price index (HPI) for Proportunity-selected properties. And FHBs can get the homes they want, as their demand for more affordable housing in up and coming areas correlates with high growth areas and properties.  

The $150m debt and equity round for Proportunity is led by VentureFriends, Kibo Ventures and existing investors Anthemis, Entrepreneur First as well as new UK proptech investors Amro Partners.  Proportunity plans to use this funding to grow its team in order to help buyers own $1 Billion worth of homes in the UK.  This new funding also allows Proportunity to increase its maximum loan size from £90,000 up to £150,000 per home, increasing their buyers’ affordability even more and helping them buy homes they actually love.

VentureFriends partner,George Dimopoulossaid: “We’ve been investing in proptech startups that improve the real estate journey since 2016. In Proportunity we saw a product that can positively impact the lives of thousands of FHBs. Proportunity founders, Vadim and Stefan, have experienced the pain of trying to get on the housing ladder themselves and we were impressed with their resilience, drive and progress so far. Proportunity directly addresses the pain of FHBs, it makes housing more affordable and more attainable while also sharing the house price risk, instead of putting the risk solely on the FHB and/or their family.”

Javier Torremocha from Kibo Ventures said: “We were greatly impressed by the vision and execution capabilities of the team led by Vadim and Stefan. Proportunity is in the very attractive intersection between proptech and fintech, and contributes to generating positive impact in people by allowing first-time home buyers access their dream homes. Kibo Ventures has been an early backer of unicorns like payments company Flywire (Nasdaq $FLYW), workforce-as-a-service JobandTalent or micro-mobility Tier and believe Proportunity has the potential to join this exclusive club. Kibo Ventures invests at an early stage in consumer and enterprise software, supporting European companies with their international expansion.” 

Anthemis Group Partner, Ruth Foxe Blader, said: “Anthemis is thrilled to continue supporting Proportunity in its journey to help first-time buyers get great homes. Despite the challenges of Covid lockdowns and market uncertainties, this outstanding team has continued its growth journey on multiple fronts. We’re excited for the next chapter!”

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. Proportunity solves that by lending up to £150k on top of the mortgage, closing that gap and helping buyers afford whatever they want – be it an extra bedroom, a garden or the ability to live in a neighbourhood with good schools. With this new funding we can help thousands more people to get onto the housing ladder.  Join us on our mission to make homeownership possible for everyone.”

So far, Proportunity has already helped people own more than £65m worth of homes.

Pevini Peiris

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