Virgil, the French fintech supporting millennial home ownership, has raised €2.1 million from Alven Capital, LocalGlobe, Kima Ventures, and a group of angel investors.
Owning a dream home is becoming more of a pipedream, especially for a generation that started careers in an economic downturn, working in cities where cost of living is on the constant rise. In Paris, the price per square metre has increased by 150 percent since 2000, while disposable incomes haven’t budged. This is a barrier the startup calls "the stone ceiling."
In effort to break the stone ceiling, Virgil provides young professionals the necessary deposit to buy an apartment. “It’s not a loan, it’s equity,” the startup says.
Virgil can provide up to €100,000 per transaction. For a 10 percent contribution, the company will own 15 percent of the apartment. The homeowner can sell their apartment at any time, or buy Virgil's share after ten years.
The company provides this example: for a property purchase in Paris that totals €430,000, and a buyer with a €390,000 borrowing capacity, Virgil would contribute the remaining €40,000, i.e. a 10 percent contribution, to enable the transaction. Virgil would then own 15 percent of the apartment for a maximum period of ten years.
The result is a “fluid, digital purchasing process” that enables people to purchase a home that meets all of their needs, like a certain size or location, without compromising due to financial constraints.
"Becoming a homeowner is the first step in building up one’s net worth. We launched Virgil to enable everyone to take this first step in the best possible way," explained Keyvan Nilforoushan and Saskia Fiszel, Virgil's founders. Previously the two founders launched the at-home hospitality startup onefinestay, which was acquired by the Accor group for €150 million.
The funding will help the company reach its short-term targets: 100 transactions per month by the end of 2020, and 5,000 total between now and the end of 2021.