Nested, a London startup that guarantees to sell your house within 90 days, raises £8M

Nested, the London ‘proptech’ startup that guarantees to sell your house within 90 days or offer you a cash advance instead, has raised a further £8 million in funding.

Passion Capital has led the round, with participation from Rocket Internet’s venture arm GFC, bringing total funding to-date to £11 million. Both VCs are existing backers of the company, whilst Passion invested in Nested co-founder Matt Robinson’s previous startup GoCardless. Tim Bunting, who is a partner at Balderton, also joins today’s round in a personal capacity.

Launched in January 2016, Nested operates similarly to a traditional estate agent to help you sell your house, but with a key (and somewhat tech-enabled) difference. In addition to providing a valuation, marketing and sales service, the startup guarantees to sell your property for 95-98 per cent of market value within 90 days, or they’ll offer you the cash themselves instead. That’s made possible because of how confident it is that with the help of tech and data it can price a property accurately enough in the first place.

Meanwhile — and this bit is crucial — if Nested does achieve a higher sale price than the one it guaranteed/offered, either before or after the 90 day window, it will split the difference, up to 70/30 in favour of the property owner. This, in theory, keeps the interests of both parties aligned.

The idea is to help eliminate the uncertainly when trying to both sell and buy a house, in terms of being caught up in the dreaded property ‘chain,’ which means you potentially miss out on your desired home, or are kept in limbo indefinitely waiting for your property to sell.

In a call, Robinson dubbed the first type of customer “Charlie Chain”. They will have found their dream home and need to proceed as soon as possible, including when a buyer has pulled out and the chain has fallen through, or they need to move within a specific time frame because of a new baby, change of school or job, for example.

The second, “Tired Tom,” has been on the market with an agent for a few months, and is tired of being messed around or the hassle of keeping the property tidy for viewings etc., and wants to sell so they can move on with their lives.

In both scenarios, Nested is basically helping to grease the wheels of a somewhat clogged up housing market, albeit taking a healthy cut along the way. However, Robinson says that for the right customer, Nested is a great option and solves a genuine pain-point. The next stage of the business is raising awareness that such an option exists and increasing the number of deals Nested can do each month.

“We are already helping 5 people a month within a few months of launching and have many more in the pipeline,” Robinson tells me. “This meant we broke even in our fourth month of trading with revenue at an annual run-rate of more than £1 million”.

This, I understand, has led the Nested team, and presumably its backers, to be extremely bullish that the young company can reach 100 deals per month very quickly. Instead, the question is now: can Nested get to 1,000 or 10,000 property sales per month. “Based on what we’ve seen so far, I believe we can,” says its founder.

Listen to TechCrunch’s interview with Nested co-founder Matt Robinson late last year