Selina Finance, the UK’s first Home Equity Line of Credit (HELOC) fintech, has raised a total of $150 million in its Series B funding. The round was led by Lightrock, a global private equity platform, with existing investors also participating to raise $35 million in equity. In addition, $115m in debt was secured from Goldman Sachs and GGC to fund further expansion as Selina builds towards a first public securitisation.
Selina was founded in 2019 and gained regulatory approval for consumer lending in 2020. Since then, the company has already made over $100 million of loans with the HELOC product in the UK, which has shown strong early adoption by UK homeowners.
In the UK, homeownership is widespread and the largest source of wealth worth trillions to consumers. Selina Finance is first to market with a HELOC (Home Equity Line of Credit) that enables homeowners to unlock the value in their homes with a multipurpose facility by borrowing against their equity at low interest rates with a flexible line of credit, only paying for the funds that they use. Widely used in the US where the market is valued at $150 billion annually, Selina has brought HELOCs to the UK to offer homeowners a new way to fund home improvements or other large purchases without the cost and inflexibility of traditional loans or having to remortgage.
Selina leverages technology to create a digital-first customer experience that is fast and seamless compared to traditional lenders, and combined with the low rates of secured lending aims to unlock the $30 billion market opportunity in the UK. Selina sees the UK property market as having a huge potential for HELOCs with many homeowners having a sizable amount of equity in their home, strong credit history and a stable income. Selina Finance has calculated using official figures that more than half of UK households could benefit from its HELOC3.
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Selina believes that accessing the wealth locked in a home should be as easy as using a credit card, where customers can draw down on their line of approved credit within minutes using their phone. Selina plans to launch a card product in 2022 to put the HELOC into people’s pockets and make it more accessible for purchases.
The launch of new products comes at a time when UK homeowners have considerable home equity, strong credit performance and stable incomes but face inflexible mortgage products and still have to rely on costly credit cards and personal loans to fund expenditures such as private education, medical bills and home improvements.
Hubert Fenwick,Co-founder and CEO, Selina Finance, commented:
“We expect demand for HELOCs to rocket in the UK over the next five years as they become the first choice of finance for UK homeowners, our early traction shows the huge potential that exists in this market. HELOCs offer a new way for homeowners to finance and advance their lifestyle; perfect for those who have worked hard to build up equity in their property, enabling them to benefit by borrowing affordably and responsibly. A HELOC is the best hybrid between a mortgage and a credit card; it’s as affordable as a mortgage and as flexible as a credit card.”
Leonard Benning, Co-founder and COO, Selina Finance, commented:
“European consumers are structurally under-served and homeowners cannot access their wealth in an affordable or flexible way with existing products. With the UK being Europe’s most dynamic market in fintech, it was the perfect place to launch HELOCs and validate the pent-up demand. UK consumers are always early adopters of new finance products, they have embraced the advantages of leading fintechs like Revolut and price comparison sites such as MoneySuperMarket, and we are confident that UK consumers will see the benefits of HELOCs and adopt them too.”
Ash Puri, Growth Investor, Lightrock, commented:
“Historically, homeowners across the UK have been underserved when it comes to accessing wealth created from their largest asset – their home. Selina’s disruptive lending model allows consumers to unlock previously inaccessible capital, whilst having the flexibility to utilise the lending facility and return as per convenience. The team at Selina have achieved impressive growth with over $100m in loans issued since founding in 2019. Lightrock is delighted to be backing such an innovative team and looks forward to supporting Selina as it disrupts traditionally inflexible lenders.”
Anna Montvai, Executive Director, Goldman Sachs, commented:
“Selina Finance’s HELOC product is innovative, and bridges the gap between the consumer credit and mortgage markets. We are excited to support the Selina Finance team in the growth of their business and loan portfolio.“