With access to real estate credit becoming increasingly complex, young, aspiring property owners are seeing that dream slip ever further away. Rising interest rates and tighter lending conditions have led to an increasingly large number of young working people renting as opposed to buying, even though 85 percent of them know that owning their main residence is the more economically sound option.
And as we all know, they’re not wrong: becoming a homeowner is a primary driver of establishing personal wealth.
"We want to transform the future of young working people by getting them out of the rental trap. Our raison d'être is to restore equality in terms of access to property. This is to offer a whole generation freedom through financial independence,” commented co-founder Saskia Fiszel.
Offering a helping hand to getting a leg up on the property ladder, Parisian startup Virgil has raised €15 million in order to further accelerate its deployment. According to the startup, €7 million of the round is dedicated solely to be used to invest in real estate with co-buyers, as they carry forward with the goal of financing €50 million worth of real estate projects per month.
Virgil offers prospective buyers a financial contribution of up to €100,000 alongside step-by-step support through the entire real estate journey, from concept to handover of the keys.
The startup’s business model is quite simple: in an exchange for an investment of 10% of the price, Virgil buys 15% of the apartment and is paid when the apartment is resold (at the latest 10 years after the purchase). By Virgil's estimates, this allows new buyers to become homeowners, on average, 7 years earlier when compared to traditional methods.
Beyond the societal benefits of helping young buyers buy, a rising tide raises all ships, the mechanism is also attractive to investors, as they then have access to a highly sought-after asset, residential real estate.
Virgil’s latest funding round was provided by investors including existing investors Alven, LocalGlobe, and Evolem as well as new investor Global Founders Capital. Additional participants include private equity investment house Aquasourca, and angel investors Clément Alteresco (Morning), Emmanuel Amon (Pégase), and Victoria van Lennep (Lendable).