QED Investors, the venture capital firm propping up the likes of Klarna and Zopa, has invested in GetGround, a London-based fintech start-up for landlords buying and managing UK rental property.
GetGround declined to reveal the value of its Series A round, which adds to two seed rounds, one of which was backed by Mosaic Ventures, an investor in digital mortgage broker, Habito.
The start-up, launched 18 months ago, was co-founded by two Singaporean brothers, Moubin and Misrab Faizullah-Khan.
It is designed to simplify the process for buy-to-let landlords by allowing them to create and manage companies through which they can purchase properties.
By putting their property portfolios into a company, Moubin (pictured) explained, “buy-to-let investors can buy with business partners, change ownership in the future, and get access to more mortgage options.”
GetGround’s platform, built on modules, provides investors with a current account to manage rental income and expenses, accounting tools to process tax returns, secretarial services, and takes care of company formation.
It charges landlords up to a £1,000 one-time fee, and then £20 per month to run the company.
The start-up integrates with an array of UK fintechs, including identity checker Onfido, cross-border payments firm Currencycloud, and payments provider Modulr. It also plugs into Companies House via an application programme interface.
“Where it used to take them two to four weeks to piece all this together with various providers, it now takes us 20 to 30 minutes to set up. And we can operate at a price point that's ten times lower than alternatives,” said Moubin.
Landlords and investors on GetGround’s platform currently own anything from one buy-to-let property, all the way up to 100 properties - but there is no cap.
The majority of GetGround’s customers are introduced via intermediaries, lenders and advisers. At present, the start-up’s network is enabling it to operate at a run rate of 2,000 new companies per annum.
With property worth £500m on its platform today, Moubin anticipates doubling this figure to £1bn “in the next few months”, averaging month-on-month growth of 20 per cent.
Neither Moubin nor Misrab come from a background in property, however. Moubin previously worked at private equity firm Apax Partners, whilst Misrab headed up data science at Indonesian firm Gojek.
The pair said they had spotted an opportunity in the buy-to-let market, which has undergone significant change since 2016 with the enforcement of stamp duty surcharges and mortgage tax relief withdrawals complicating the business for landlords and whittling down their profits.
Between 2015 and 2019, purchases in the space fell by 40 per cent. In 2020, around 37,000 buy-to-let mortgages were completed, levelling out to the same period a year prior.
“You have an entire ecosystem which is lost given the speed of change,” Moubin told FTAdviser.
The start-up will use the capital from QED Investors to grow its distribution channels, by investing in its employee count.
At the end of last year, GetGround employed 20 people. It has since more than doubled this figure to 50 team members.
Asked which companies pose competition to GetGround, Moubin said: “There are parts of us in various places in the market. Company formation agents help landlords set up a company. Accountants help with tax returns. Structuring lawyers help with shareholder agreements. Banks provide them with bank accounts. But we’re the first to pull together all these services.”
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