Nested, the chain-breaking estate agency that offers vendors a guaranteed sale of their property within 90 days, has secured a new funding injection totalling £8m.
The PropTech start-up has been trading for just four months having been founded by Matt Robinson, the man behind online payment firm GoCardless.
The agency provides an instant online valuation based on a combination of publicly available data, information entered by the homeowner, and an internal algorithm. It then guarantees to sell for 95 to 98 per cent of this figure dependent on area and property type.
Nested offers vendors an interest-free loan for this ‘guaranteed’ amount; this is the price at which the property is marketed by the agency. If it does not sell within 90 days then the agency will guarantee to pay that sum to the seller, allowing him to continue with his chain.
If Nested then achieves a higher sale price after the 90 day window, the profit is split 70/30 in favour of the vendor. The agency charges a commission of 2.5 per cent including VAT.
Robinson suggests that company’s success so far is at least partly down to its offer being well-suited to the currently-troubled London market.
“With property transactions in London down by 32% this year, vendors are understandably frustrated and are increasingly attracted to the certainty and security that a guaranteed sale provides. Our ability to secure millions of pounds worth of funding just months after starting reflects the high demand among consumers and the recognition that this sector sorely needs to innovate” he says.
He says Nested is processing five sales a month but could in theory undertake many more. “I see no impediment to us doing 100 sales per month or more by the end of the year” he adds.
Robinson continues: “In today’s market, it has become almost impossible to buy and sell at the same time. With one in three transactions falling through, sellers are reluctant to accept offers from buyers in a chain, and when they do, the whole chain is at risk of falling through.”
Nested has received the £8 million funding from investors including Passion Capital, Balderton Capital and GFC; all have previously invested in tech start-ups including Citymapper, Crowdcube, GoCardless and Nutmeg.
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It's certainly an interesting and a bold play, I wish them every success, it's a lot less expensive for a Vendor to use this service than sell to a quick sale company and less nerve wracking than taking a bridging loan. It's a big market though and if demand is high there will be a voracious need for capital and a substantial risk of loss if they get their figures wrong, risk and reward, it's what innovative business is all about.
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