2 years ago - 3 minute read
Like so many of you, we’ve been finding our feet in the post pandemic world. As a build-phase startup we were affected in different ways to many companies but we still had to take quick and decisive action to stay the course. I’m pleased to say we’ve made great progress towards our launch. We’re on-course to start lending once we’re regulated.
During lockdown, we continued to talk to our (future) customers. We wanted to know who needs Fronted the most, how they think about moving. We wanted to know when they start looking and when they work out how they’ll pay their deposit. We wanted to know how much they earn, how much they plan on spending on their rent and how much they can afford-in terms of loan repayments.
We started with surveys, and putting people through our post-application questionnaire, but soon realised that asking these questions upfront would help us and our renters to think correctly about affordability.
We’ve now rolled out a new version of our onboarding flow live at https://get.fronted.rent . This now feeds directly into our waiting list for when we’re regulated and ready to trade.
We made our first successful loan (to ourselves), in production. This coordinates the services of Yobota and Modulr as well as the Fronted back-office system we call Synthwave.
It’s a significant milestone because now there is nothing technical holding us back from launching.
We are still in the early stages of marketing and learning about our customers, but one thing is for sure, people want this product. We’ve seen really strong demand from customers coming through from Google searches and some small trial ads we’ve run.
It has opened our eyes to two different customer groups: those that are looking for the convenience of spreading the costs of the deposit to make moving easier and those that need our help to move.
So far more than 60% of people who apply for Fronted don’t meet the affordability criteria we’ve set for ourselves at launch. These declines are due to one of two things (or both): they failed the affordability assessment or their deposit was too small and didn’t meet our current minimum of £800.
On further investigation, almost 45% of these potential customers are sharing with other tenants. Therefore, while their deposit contribution is lower than our minimum, their total deposit is not. The multi-tenant Fronted Deposit is something we expect to see a lot of, and we will focus on solving this issue once we have launched.
Some other interesting facts about our customers: the average rent amount for our customers is £730, which is a deposit size of almost £913. The median salary is £22,000, and most people who come to us are still looking for a property, as much as 60% of people.
We had to say goodbye to two fantastic colleagues during the lockdown, but I am pleased they both found new amazing companies.
We were in the middle of raising our seed round when COVID hit and fund raising largely paused as investors re-assessed, recalibrated and got used to a Zoom-first world. Thankfully, and with the help of the Future Fund, Passion Capital and Truesight, we raised a loan note to continue building Fronted.
As a result of COVID and anticipating a delay to the start of the FCA Sandbox, we moved to a four+ day work week and a ‘remote-first’ way of working. We gave everyone a WFH allowance for equipment. Our little office in Old Street is still there, and we often use the roof terrace for team get-togethers and big meetings.
Surprisingly, or not surprisingly, we found that we’re getting as much if not more done in 4 days a week than when we had some of the team (the founders mostly) working 5 days and other staff working 2 or 3 days. There’s a catch-up penalty that comes from having some members of staff needing to catch up on work that’s happened while they were away.
We’re planning on keeping the 4 day work week a little while longer and using the cost saving to extend out our runway so we have more time in the sandbox before we raise for the next big milestone. More on that another time...
The market is picking back up and we’ll be launching into a world that needs our product more than ever. We’ll give options to people who desperately need them, we’ll be the safest cheapest and most consumer friendly lender in existence and we’ll make renting work for renters.
2 years ago - 3 minute read
Fronted is a trading name of Fronted Holding Ltd. We are registered in England and Wales (Company No.12278750), registered office address is Fronted, The Fisheries, 1 Mentmore Terrace, London, E8 3PN. Fronted Loans Ltd (Company No.12307305) is authorised and regulated by the Financial Conduct Authority under a Consumer Credit Licence (FCA No. 933316). Fronted Ltd (Company No.12304059) is authorised and regulated by the Financial Conduct Authority under a Broker Licence (FCA No. 933317).
Fronted Loans Ltd and Fronted Ltd is a wholly owned subsidiary of Fronted Holding Ltd. We are part of the FCA regulatory sandbox - Cohort 6. The regulatory sandbox allows firms to test innovative offerings in a live environment. More information on the FCA's regulatory sandbox can be found here.
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