'Fintech has arrived in mortgages': London's Habito raises £5.5 million from Silicon Valley fund
The Series A round takes the total raised by the British startup to £8.2 million. Other investors in the two-year-old business include Transferwise CEO Taavet Hinrikus, Funding Circle's cofounder Samir Desai, and Russian tech billionaire Yuri Milner.
Habito is part of a growing "PropTech" scene in London, a subset of fintech - financial technology - that applies tech to the property sector.
Habito CEO and founder Dan Hegarty told BI: "Someone in the mortgage market was saying to me the other day they think they've seen more innovation in the mortgage industry in the last 12 months than they have in the last 10 years. That's a general feeling. Fintech has arrived in mortgages."
"You can see why it was one of the last places to approach because it is so complex and thorny and there are no quick wins. We've got some pretty radical ideas about what we can achieve here over the next 12 to 24 months."
Habito lets people search for and secure the right mortgage for them. CEO and founder Dan Hegarty told BI: "The fundamental premise is it's the only place where someone can come online, obtain real-time online mortgage advice, and then scour the market for the best product for them.
"We then go and get the product for them, I think that's the primary difference. We're not just there to give people price comparison, we offer people the full service all the way through to completion."
The whole process takes up to half an hour on Habito's site, although the mortgage itself can take longer depending on the provider.
Habito's service has been live for 9 months and the startup has completed £50 million-worth of mortgages for 20,000 customers.
"We're getting into relatively significant sums now," Hegarty says. "We've grown 30% month-on-month every month since we launched. We've just come out with a tube campaign, that's been more successful than we anticipated, which is wonderful. Every week is our busiest week ever but we've been particularly busy."
Hegarty, formerly an early employee of Wonga, says he has "known the Ribbit guys for maybe 5 or 6 years."
"There wasn't a defined beginning to the process but I'd say the whole thing took about 2 months from start to finish," he says of the fundraise. "They were the top of our list and they seemed excited about what we were doing so we didn't have to go through a whole beauty contest."
Habito currently employs 25 people and Hegarty says the money will go towards expanding the company's product and engineering team.
He says: "Given the complete lack of digital infrastructure in the mortgage industry, even trivial things take serious engineering effort. We're having to expand that team pretty rapidly to achieve our ambitions."
Habito is planning to launch a real-time agreement tool and revamp its mortgage alerts in the first quarter of 2017.
Trussle, a rival online mortgage broker, has sought to grow through a partnership with online estate agency Zoopla. Hegarty says Habito is also keen to grow through partnerships, saying: "We're in talks with everyone you might expect."
Habito has already inked deals with Perkbox, Experian, and online estate agent Settled and Hegarty says the startup is hoping to do more deals in the future: "Conversations have been going on for a while and we're trying to find something where we can do something significant and deeply integrate."