A UK-LISTED fintech fund that has a stake in Zopa has invested £2.5m in residential rent-to-own specialist Unmortgage.
Augmentum Fintech’s investment is part of a £10m fundraising round, with other investors including Exponential Ventures.
It is the fund’s second major investment this month after it put £5.3m into mobile-only current account provider Monese.
Unmortgage offers a part-own part-rent model of home ownership, requiring as little as five per cent deposit.
Its customers then pay a market rent on the portion of the home that Unmortgage owns, with the ability to increase the equity in the property as their financial circumstances allow.
The new funds are being raised by Unmortgage to scale the business and take the team from 12 to 40 people before the end of the 2018, prior to launch in 2019.
“One of the things we look for in a potential investment is a business that is genuinely pathfinding in a sector which is ripe for innovation,” said Tim Levene, chief executive of Augmentum Fintech.
“In too many cases home-ownership remains out of reach for people, and the Unmortgage model addresses in an innovative way how people can access the homes they both need and want.
“The business is also attracting fintech talent who want to participate in a business that has at its heart a social purpose.”
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Augmentum Fintech was launched by venture capital firm Augmentum Capital, which had a 7.4 per cent holding in peer-to-peer lender Zopa worth £18.5m that was transferred into the investment company portfolio.