Localglobe, the new VC fund from father and son duo Robin and Saul Klein, has led a £1.1 million investment in online mortgage advisor Trussle. Others joining the round include notable U.K.-based investors Ed Wray, co-founder of Betfair, Dan Cobley, ex-Google U.K. MD, and Ian Hogarth, co-founder and chairman of Songkick.
London-based Trussle, which is also backed by Seedcamp and Entrepreneur First, is seeking to challenge the traditional mortgage broker with a tech-driven solution that advises customers on the best deal available, and helps manage the mortgage process if they choose to proceed.
And, of course, the startup claims to do it a lot cheaper. “Today you have to go direct to a bank or via an independent, high-street broker to get a mortgage,” says Trussle co-founder Ishaan Malhi, describing the status quo. “Most seek independent advice rather than be restricted to a single bank’s options, but these traditional brokers follow a laborious, manual and one-size fits all process. Most brokers charge between £300 – £1,000 just to give advice and are rarely available at your convenience.”
In contrast, Trussle’s mortgage “matchmaking” service — which is free to the end-customer but makes money via a mostly flat fee from the mortgage provider — promises to make finding the best-value mortgage a “smarter, faster and more transparent process,” says Malhi.
“Our proprietary software scours thousands of mortgages to advise customers on the best available deal and manage the end-to-end process for them. Whether you register as a first-time buyer or existing homeowner, we then continually check in throughout the lifetime of your mortgage, using automation to let you know when you can switch to a better deal, which could save you £4,000 per year on average.”
Checking in throughout the lifetime of a mortgage is key here — and in some ways is reminiscent of the recent crop of online insurance brokers — since it has the potential for Trussle to create an ongoing relationship with each of its users, with recurring revenue to boot.
The draw being that a Trussle user could make additional and not insignificant savings by switching mortgages more often when a better deal or lower interest rate becomes available. By some estimates, says the startup, U.K. homeowners are losing £29 billion a year by failing to re-mortgage and switch to lower fixed rate deals.