In the UK, it is quite exasperating to find a property, which is affordable and at the right location. Adding to this, tenants are forced to pay expensive deposits making renting a property even more cumbersome.
To resolve this issue that tenants face, Flatfair, a London-based fintech lets landlords offer “deposit-free” renting. Founded by Bartosz Alksnin, Daniel Jeczmien, and Franz Doerr in 2016, Flatfair uses technology to eliminate the hassle of managing deposits and pays its partnered agents a commission as they bring new tenants.
Secures €10M funding
Now, Flatfair just secured £9 million (nearly €10 million) in Series A funding round. This round was led by Index Ventures along with participation from Adevinta, Revolt Ventures, Jeremy Helbsy, former Savills CEO, Greg Marsh, founder of Onefinestay, and Taavet Hinrikus, co-founder of TransferWire.
The London startup plans to use the new capital to expand its team by hiring data scientists, product engineers, and business development specialists. Also, Flatfair will build new features as it aims to expand its platform and focus on making renting fairer and transparent for both tenants and landlords.
Insurance-backed payment technology
To resolve the issue of tenants paying double deposits while moving to a new home and make it fairer for them, Flatfair uses an insurance-backed payment technology. It provides tenants an option to pay a per-tenancy membership fee rather than paying the full deposit. This is done by authorising the bank account via a debit card with Flatfair. When the tenant plans to move out, Flatfair’s platform handles the end-of-tenancy charges including dispute resolution.
Effective alternative to deposits
Like any new technology or solution, the Flatfair platform also has both pros and cons. However, tenants who have restricted cashflow can use this model as an alternative financing options to paying a whole month’s deposit. Tenants registered with the platform are given a trust score, which helps them easily move to new properties in the future.
Also, the company is testing Open Banking, which lets carry out credit checks by analysing the transaction history to verify that the tenants have paid rent on time in the past. Some major real estate companies such as Greystar, CBRE, and Places for People use Flatfair’s payment technology and let tenants secure their tenancy using their debit card.
Addresses landlords concerns too!
Besides making it beneficial for tenants, Flatfair offers 12 weeks of protection for landlords and free recovery of additional end-on-tenancy charges. This removes the stress that landlords and agents face when it comes to handling the recovery themselves.
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