London: London-based proptech Mashroom, which delivers an end-to-end automated lettings and property management service, has announced raising around €4.4 million from the British Business Bank’s Future Fund and current investors, which brings their total funding to €7.7 million.
Founded in 2018, Mashroom incorporates the entire rental life-cycle all under one roof, from property advertising, arranging viewings, credit history checks, maintenance, to end of tenancy, and handling potential disputes between landlords and tenants.
With over three quarters of the rental market controlled by high-street agents, Mashroom is working to change the mentality around rental transactions and remove dependency on letting estate agents. Despite the pandemic, Mashroom has already united over 4000 landlords and tenants.
The self-service platform enables landlords to create listings and tenants to find properties in an easy way. The whole process, including time spent on credit and reference checks, can take less than 2 hours, as the platform also allows users to sign rental agreements and renew contracts online in just a few clicks. Open banking technology makes rental payments seamless, automated and secure for tenants while offering real-time payment information for landlords.
Mashroom has also developed a Deposit Replacement Product, an alternative to the traditional deposit, which sees tenants simply pay one week’s rent while offering landlords even more protection than a regular deposit – up to 12 weeks protection compared to 5 weeks with a traditional deposit.
This product also reduces the cash burden for tenants as they don’t have to front the deposit and lock it away for the duration of the tenancy. The Deposit Replacement Product is underwritten by global A+ rated insurer Arch Capital Group, together with Mashroom’s other insurance services such as rent guarantee, and emergency insurance. Contents insurance is underwritten by Ageas, one of Europe’s largest insurers.
For the parts of the rental process that still require a human touch, Mashroom connects departing tenants with incoming tenants directly. The platform enables landlords to enlist the help of their current tenant, who then shows the property to prospective tenants. On a successful let outgoing tenants receive a reward of one week’s worth of rent for their efforts, which in turn provides transparency between landlords and tenants while helping reduce void periods. The cost for landlords is approx. 2% of the annual rental income which is more than 5x cheaper than average letting agent fees.
The platform sits beside Mashroom’s property sales and mortgage business making Mashroom a full-stack residential property platform. The basic service is free for tenants and landlords whilst the company covers its costs via its financial products offering which includes deposit replacement, advance rent, and insurance products.
The recent funding will help the company accelerate its growth, in a time where the digitization of property management is further boosted by social distancing measures. In particular, the startup aims to further enhance its platform, making the process as attractive as possible for both landlords and tenants.