London-based rented property marketplace Vesta has held £2m first close for its seed round, to support product development Vesta told FinTech Global.
The company is hoping to hold a £3m final close for the seed round in March.
Commitments to the round came from backers including UK Finance chairman Bob Wigley, former CBRE residential capital markets head Chris Lacey, former Bovis Homes CEO David Ritchie, Sabre Insurance former chairman Keith Morris, and Vesta founder David Toplas.
Vesta is an online marketplace for buying and selling residential investment property. Through the platform, consumers can buy a rented property in a transparent way, without a middle man and through a secure platform.
Consumers are also able to invest in to buy-to-let properties portfolios, with commitments from £1,000 and a 2 per cent transaction fee. Quarterly dividends will be earned by the backers.
The platform launched earlier in the month and has secured rights to over 177 tenanted properties which are worth over £50m, according to the company.
Capital from the round will enable Vesta to further enhancements to its platform and support the roll-out of its solution across the UK. Equity will also be used for sale and marketing initiatives, as well as furthering the development and enhancement of its platform, the company said.
Vesta CEO Russell Gould said, “Our investors share our belief that Vesta’s innovative marketplace will revolutionise the Private Rented Sector (PRS), bringing together housebuilders, buy-to-let sellers, buyers and property investors and removing significant market inefficiencies.”
Vesta is currently focused on developing its residential property investment platform. In the future, the company is hoping to launch a solution to enable fractional investing in pre-built properties, with a minimum investment of £1,000, the company said.
A statement from the company said, “The advancement in property related technology is gaining real momentum in the UK and across the globe. Utility companies embracing smart metres, video and mobile linked doorbells, the rapid evolution of IOT within the home, Elon Musk’s new solar tiles, AI based ‘robo’ mortgage advisors, use of ‘blockchain’ to support the conveyancing process and the advent of fixed fee property marketplaces like Vesta is just the start of the PropTech evolution.”
As for the PRS market, Vesta believes the sector will continue to grow. PRS currently accounts for around 20 per cent of the UK housing stocks, with this to increase to 25 per cent over the next 10 years, the company said.
It added, “Demand for rental properties will increase due to costs related to getting on to the housing ladder and an increase in younger people electing to be more mobile to accommodate career opportunities.
“Institutional investment will increase significantly and will switch from build to rent to more investment in existing properties as build to rent opportunities and land purchase opportunities become more rare and more expensive.”
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