The StrideUp App
The London-based fintech start-up founded by two former Deutsche Bank workers will use the funding to help young people across the country get a footing on the housing ladder.
StrideUp has completed a seed funding round of £1.6m in equity and debt financing led by Picus Capital, a leading European VC fund, and a group of prominent angel investors with technology, finance and real estate expertise.
Average local house prices are over 7.6 times annual salaries, whilst average mortgage amounts offered to first time buyers languish at 3.6 times salary. This wide gap means the conventional mortgage market leaves most would-be buyers priced out of their homeownership dreams.
StrideUp aims to eradicate this problem by helping young people buy a portion of their home, say 10% or 20%, and as they live in the property, they gradually increase their ownership.
One of the main complaints with renting is the insecurity and inability to really make it your home; StrideUp’s customers have a secure, long term arrangement and always have the ability to buy out 100% of their home.
StrideUp was founded in 2016 by Sakeeb Zaman and Rohan Trivedi, both formerly of Deutsche Bank. Operations began in summer 2017 and StrideUp is currently receiving around five new applications on a daily basis.
This funding round will be used to accelerate growth by making key hires in operations, development, marketing and risk; improving technology and processes and increasing the rate of transaction completions.
Sakeeb Zaman, co-founder of StrideUp, said: “Housing affordability is one of the UK’s most pressing financial issues. Homeowners are almost twice as likely to be satisfied with their housing tenure compared to renters. But many people are stuck renting for years because of high house prices and limited availability of mortgages.
“With frustration building up we saw a pressing need for an alternative solution. StrideUp gives people an easier and more gradual approach to homeownership - they simply start by buying a portion of their home and can increase as they save.”
“At £1.3tn outstanding, and over £200bn in annual lending, the residential mortgage market is by far the largest segment of consumer credit in the UK.
“Yet structurally the product has not evolved in response to the breakdown in house price to income levels and fundamentally it does not serve well the needs of the majority.
“We see a massive opportunity in redesigning home finance for today’s aspirational buyers.”
Robin Godenrath of Picus Capital added: “StrideUp is offering an innovative solution to allow young people to own a home who would otherwise have to save for years to get a traditional mortgage.
“On the other hand, it gives investors access to a very attractive asset class via a shared ownership model.
“StrideUp itself provides a truly digital platform for the related transactions and with this funding round accelerates their path to becoming a very relevant player in UK home financing.”
The need and demand for this type of product has been proven by the government’s Help to Buy program and shared ownership schemes. StrideUp builds on this by offering a flexible offering available to the whole market.
Using technology and focusing on customer experience, StrideUp removes the traditional inefficiencies associated with shared ownership models, overall making it easier and cheaper for customers to reach their goal of owning their home outright.