/start ups

News and resources on fintech start-ups, scale-ups, hubs, accelerators, VCs and funding worldwide.
Fintech Fronted shuts up shop

Fintech Fronted shuts up shop

Fronted, a UK home lending startup founded by former Apple, Monzo and Bud executives, is shutting down in the face of rising capital costs.

The rental deposit lending business raised over £20m in a debt and equity deal led by Fasanara Capital in November. This came after Monzo co-founders backed the fintech in a £1m fundraise in May 2021.

Fronted was set up by CEO Jamie Campbell, formerly of open baking firm Bud, Simon Vans-Colina, previously of Monzo, and Anthony Mann, a former Apple executive.

Fronted's initial premise was to offer a 12-month loan for renters who do not have an existing deposit to buy the property of their choice. The new funding was part of a pivot to develop an app for renters who need to pay a second deposit before receiving the old one from their previous tenancy.

But after a series of repeated interest rate rises to combat soaring inflation, the firm has thrown in the towel. Fronted's Website has now reset to a holding message:

'After an incredible journey together, we’re saying farewell to Fronted.

Thank you for being a part of our journey, your support made it all possible.

-Jamie and the Fronted Team'

In an interview with techEU, Campbell says: “The real reason behind the issue is that in September of last year, our cost of capital went through the roof which really impacted our ability to offer the product at a price that consumers would pay for it.

“We knew that we had good results when customers were paying around about £50 for it, but the shift in the market meant we couldn’t offer it for less than £100, and the price elasticity for our customers just wasn’t there.

“We were never able to go to market with the product that we wanted at the price we wanted.”

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 16 August, 2023, 12:31Be the first to give this comment the thumbs up 0 likes

"Fronted's initial premise was to offer a 12-month loan for renters who do not have an existing deposit to buy the property of their choice."

To BUY or RENT the property...?

Assuming it's RENT. IIRC, I had to put up two months' rent as deposit for my apartment in London. IMO that's not a big sum. Even if the renter doesn't have that much money on their own, I expect them to be able to get it from their employer as salary advance.

I wonder what's the quality of loan given to people (a) who don't have a couple of thousand quid ready cash (b) who can't get that kinda money from their employer, and (c) for whom an additional GBP 50 cost of loan becomes a deal-breaker.