UK-based proptech startup Nested, an online real estate agent, has closed a round of £8 million. The investment was led by Passion Capital and GFC, with participation from Tim Bunting.
Nested offers the same services as a traditional real estate agent, but with more benefits. Unlike other real estate agents, in an uncertain marketplace, Nested guarantees owners that they will sell their property within 90 days - or Nested will give the home-owner the money themselves. If Nested achieves a higher sale price, either before or after the 90 day window, the profit is split up to 70/30 in favour of the vendor. The entire process is designed to be as quick and convenient as possible for the vendor.
The startup was founded in January 2016 by Matt Robinson, who previously co-founded the online payment company GoCardless.
“With property transactions in London down by 32% this year, vendors are understandably frustrated and are increasingly attracted to the certainty and security that a guaranteed sale provides," Robinson commented, in a statement. "Our ability to secure millions of pounds worth of funding just months after starting reflects the high demand among consumers and the recognition that this sector sorely needs to innovate. After just four months we are processing five sales a month, and have demand for far more – I see no impediment to us doing 100 sales per month or more by the end of the year.”
Nested provides an instant online valuation for a property based on a combination of publicly available data, information entered by the homeowner, and an internal algorithm. Nested will guarantee to sell for 95-98% of this valuation (dependent on area and property type) in return for a 2.5% (+VAT) sales fee.
If the property has not sold after 90 days, Nested will take on a mortgage on the property and transfer the cash to the owner, with the remainder to be paid to Nested when the property sells.
“In today’s market, it has become almost impossible to buy and sell at the same time," added Robinson. "With one in three transactions falling through, sellers are reluctant to accept offers from buyers in a chain, and when they do, the whole chain is at risk of falling through. People regularly miss out on their dream-home or waste months stuck in limbo as a result and we are passionate about solving this important problem for UK homeowners.”
“Consumers have been crying out for a solution to the pain caused by property chains," commented Robert Dighero from Passion Capital in a statement. "The success which Nested has already seen in just four months is testament to the combination of a great solution to a real, burning problem and Matt and the team’s drive and ambition – something we have already seen at GoCardless. We believe they are transforming the way property is bought and sold and are proud to support them on the journey.”
Read more: PE Hub Network (Press release)