London based start-up, Homeppl, has raised $2million to continue its expansion in the UK rental market. The tenant referencing platform assesses the UK’s 15 million tenants’ real risk level. This enables letting agents to safely fast-track growth without the risk of fraud, default, or the delays that restrict lets from the 1 in 3 tenants blocked by current archaic processes.
Rather than relying on outdated and unfair tick-box assessments, Homeppl is unique in that it leverages Open Banking, proprietary behavioral analysis and fraud detection tests to assess the financial situation of potential tenants and ability to afford rent. With COVID-19 putting pressure on personal finances there is an increased risk of defaults and frauds, confidence is now a key concern for many agents and landlords.
Homeppl is backed by some of Europe’s top venture funds, including Ascension Ventures, Fair By Design, and JLR Star and is a Barclays Techstars company. The focus of the round will be to support its increasing growth with more staff in R&D, operations, and sales.
Ending the unfair tenant tax and giving agents confidence
Homeppl’s approach means that up to 5 million tenants who are currently rejected by the system would be able to pass checks. These “invisible” consumers include the self-employed, international students and expats.
Simultaneously, Homeppl also boosts the security of landlords and tenants by ensuring no good tenant is rejected and catching the 1.5% of applications that are fraudulent.
Homeppl’s service approves 95% of tenants, compared to alternative, archaic credit check services whose high rejection rate (on average 30%) means ‘good tenants’ slip through the cracks.
Many in these groups usually have to pay extra for large down payments, find a UK guarantor, or end up in insecure rental contracts, creating a “tenant tax” for those who don’t meet strict criteria.
The company is trusted by some of the big names in letting, including Knight Frank and the Countrywide Group. It has approved more than £1bn of revenue to its clients, allowing them to transact with more good tenants, and keep their assets and clients safe from defaults or fraud. Its approval rate gives a 25% approval rate increase for agents and landlords, without compromising security – Homeppl has 0% defaults and detects the 1.5% of all applications which are fraudulent.
Homeppl was founded by Alexander Siedes who drew on his experience working in military intelligence in Israel to develop the platform and experienced the unfair reality of the market firsthand when moving to the UK for his BSc and MSc.
Alexander Siedes, Homeppl co-founder, said: “The rental market has used old credit check methods to assess whether a tenant can afford to pay. We need to stop imposing an unfair “tenant tax” on consumers and stop giving landlords false confidence – it’s time the market used a solution that’s fair for both sides and prioritises giving an accurate assessment. The pandemic is compounding this problem and has reinforced the need for a robust due diligence tool.”
Emma Steele, Investment Director, Ascension Ventures and Ascension Fair By Design Fund:
“We saw immediate strength in how Homeppl seeks to bridge the gap between Proptech and Fintech. Homeppl encourages financial inclusion in the space where all tenants can get fair and equal access to the rental market based on their true creditworthiness and transactional ability. We see Homeppl solving shortcomings faced by those from disadvantaged financial backgrounds, creating a frictionless international economy”
Russell Markou, Quintaini (formerly Tipi) Head of Operations:
“Homeppl is a great safety net. Fraudsters are getting smarter and more sophisticated by the day so it’s vital our partners can adapt fast to reduce our exposure. We’ve had some poor experiences in the past but the potential pain Homeppl prevents through their diligent process makes a positive difference…”