Participated · Debt Financing · Jul 2018

Proportunity is a UK-focused fintech founded in 2018 by Romanian founders that uses proprietary AI/ML to identify relatively cheap real estate with strong price-growth potential. The company offers mortgages with a 5% deposit to help first-time buyers and young families access homeownership. Its AI selects properties it predicts will appreciate, and the business has grown rapidly—clientele grew 200% year-on-year. Proportunity has helped clients purchase over EUR 117M of real estate and financed almost EUR 47M of purchases in 2022 (a 152% improvement versus the prior period). The startup plans to develop new products to cement its UK position, including mortgages with a 0% deposit and a rent-to-own offering, with launches targeted as soon as this year. Proportunity provides home purchase equity loans that let buyers purchase with a 5% deposit by offering an equity loan of up to £150,000 or 25% of the house price. That equity loan sits on top of a mainstream mortgage (up to 4.5x income), meaning customers can effectively borrow up to six times their income. The company says it uses machine learning to identify fair-valued homes in high-potential growth areas, which it argues de-risks lending and reduces the need for large deposits. Proportunity plans to use new funding to grow its team and increase its maximum loan size from £90,000 to £150,000 per home. The startup cites that some 85% of U.K. renters want to own a home but are blocked by high deposit requirements and rising house prices. Main competitors named in the article include Generation Home and Wayhome (aka Unmortgage). Proportunity is a London-based startup that provides deposit-boosting equity loans of up to £90,000, enabling buyers to complete purchases with only a 5% cash deposit. The company says it is the only 5% LTV lender in the UK, according to CEO and co-founder Vadim Toader. It recently secured a debt capital injection of up to £7.5 million from Conister Bank and others to manage record demand following Britain’s post-lockdown housing boom. Proportunity’s portfolio has expanded rapidly, doubling over the past two years in just the last two months. To support further growth the company has hired Marita Cavalcanti as CFO, launched a new intermediaries platform for mortgage brokers, and joined Tech Nation’s fintech cohort. The facility is intended to allow Proportunity to keep up with demand and continue issuing loans while other lenders pulled back. Proportunity provides 'Help to Buy'-style equity loans of up to 15% of a property's value to help primarily first-time buyers increase their effective deposit and secure more competitive mortgages. Borrowers pay monthly interest from the start and must repay the equity loan at 15% of the current market price on sale or remortgage (within five years), so repayments track house-price movements. The company uses machine learning-based forecasting that combines data such as crime, school ratings, broadband speeds and pollution to identify good-value properties and reduce risk. Proportunity says it has helped more than 20 and fewer than 100 homes and currently works with 12 mortgage brokers; two of the U.K.'s top-five high-street lenders have co-lent on multiple homes. The team has built partnerships with real estate agencies and their mortgage-broker arms to generate referrals of first-time buyers. Founded in 2016 by Vadim Toader and Stefan Boronea, the company remains focused on scaling its lending model and distribution partnerships in the U.K. Proportunity is a London-based startup and Entrepreneur First alumnus that uses machine learning to forecast future house prices and identify high-growth areas. It is FCA-authorised as a mortgage lender and plans to offer equity loans of up to 15% of a property's price to boost buyers' deposits. Proportunity's model combines its forecasts with property selection and then provides interest-only equity loans repayable after five years at 15% of the current market price. The company says combined monthly repayments will be lower than taking a 95% mortgage and, unlike shared ownership schemes, borrowers do not pay rent on the equity portion. To begin lending it has secured £5 million in credit and has raised £2.7 million in funding to bring the equity loans to market and further develop its price-forecasting technology. Backers named in the funding include Global Founders Capital, Concrete VC (backed by Starwood Capital Group), Savills, Entrepreneur First, Trusted Insights, Le Studio VC, and angels including Matt Robinson, Chris Mairs, Charlie Songhurst, Nicolas Berggruen and Julian Critchlow. Half the Proportunity team, including CEO Vadim Toader, are taking out a Proportunity loan to test the product themselves.