The COVID-19 Pause
Fronted is a London-based fintech startup company that helps users pay the initial rental deposit in bite-size chunks. The business then allows users to get their money back once the deposit amount is paid in full.
The fintech company was founded in 2019, with plans to launch the business in March 2020. Unfortunately, the COVID-19 pandemic stepped in, and Fronted chose to push back the launch date. Now the business is launching its services with Financial Conduct Authority (FCA) approval.
In a statement to Startup Savant, startup Co-founder and CEO Jamie Campbell said, “Small businesses and startups have had a tough year.” He continued, “Like other business owners we were forced to put plans on hold, but now we are launching with more demand than we can serve and a rental market that needs Fronted more than ever.”
To qualify for the fintech company services, one must be a UK citizen, have an active bank account of more than six months, and a minimum income of £12,000 (around $17,000). Additionally, loans from the business last for at least 12 months and have a 12.5% interest rate.
About the Fintech Startup Company and Market
Fronted uses open banking technology to provide a credit product designed to finance deposits directly. As a result, the company can finance deposits more cheaply rather than using credit cards and overdrafts. In addition, the startup business has raised £375,000 (roughly $521,000) in seed funding from Passion Capital and Truesight.
The launch of the company comes at a crucial time in the London real estate market as rent prices dropped in the city by 8% due to the population decrease in the capital city. The population decrease is predicted to be near 300,000 by the end of the year.
To combat these rental issues, fintech companies like this one become crucial to helping the real estate market. The global fintech market is expected to grow at a CAGR of 23.58% between 2019 and 2025.
Campbell said in an interview with TechCrunch, “Renting sucks — anyone who rents knows it. There are so many problems to solve and we intend to tackle them all bit by bit. But first, we are going to pay people’s rent deposits for them so they can pay us back in bite-size manageable amounts.”
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.