DOUBLING DOWN ON FUTURERENT

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5 AUGUST 2022

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GIVING PROPERTY INVESTORS TOMORROW’S RENT, TODAY

After a year of rapid growth, it’s great to lead Futurerent’s $9 million Series A round. Futurerent is a fintech start-up which gives landlords early access to their rental income, whenever they want it, for a simple fixed fee.

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THE PROBLEM

There are currently 2.1 million investment properties in Australia and if you have ever tried to refinance to take some money out of your asset (less than $100,000) you may have felt the pain of a long, document heavy process that, a lot of the time, still doesn’t yield results – notwithstanding the value in your property.

There are typically two options in market: i) personal loans which are expensive and not available to those who don’t have an income (for example, asset-rich retirees); and ii) re-financing, which is fraught with issues, including the time to submit an application, extensive paperwork and fees associated. The borrowing process is unreliable, with over 50% of refinance applications by landlords failing. The ‘red tape’ involved in refinancing makes borrowing $100,000 just as painful as borrowing $1,000,000, with many property investors required to take out a new loan.

This process is made even more difficult, and typically not available for people who do not earn an income. This accounts for over a third of the 2.1m investment properties which are owned by Australians who are asset rich, but don’t have a steady income. For them, any lending from banks is almost impossible, notwithstanding the value of their assets.

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THE SOLUTION

Futurerent allows landlords to receive up to two years of rental income in advance, at a fixed cost of 7.5% per annum. Futurerent receives a portion of the rental income over the repayment term, with the remaining rent received by the landlord to meet their cashflow needs. With no paperwork, no interest or hidden fees and funding approved in 2 days, Futurerent gives property investors the simplest and fastest way to access up to $100,000.

Using the platform, property investors are accessing an average of $38,000 in advance and applying for a total of over $2 million in advanced rent each month, to help finance deposits on additional properties, renovations, and general cash out purposes. Futurerent's unique funding model and focus on high quality clients who are property investors, has resulted in zero losses or impairments to date, including all through the COVID 19 pandemic.

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INVESTMENT THESIS

HIGHLY EXPERIENCED TEAM AND RAPID EXPANSION

We were introduced to the team two years ago and were immediately impressed by Godfrey Dinh, founder and CEO of Futurerent. There are two ingredients we seek out in a founder; personal experience and expertise in the space, and ability to execute in a high growth environment. It is clear the Futurerent team has both – as seen by the team’s credentials and impressive traction so far.

Godfrey has over 15 years’ experience in property investment and structured finance, including co-founding a property business in 2014 and buying and selling his own investment properties in Australia and the US. Godfrey has invested over A$1.3 billion, previously as VP of Commercial Real Estate at Deutsche Bank in Australia and also working in Investec’s Property Investment Banking team.

Since its first seed funding round, Futurerent demonstrated product market fit on a shoe string, and have built the foundations for scale.

With extensive experience and a strong passion for the space, Godfrey has demonstrated the ability to combine strong business growth with an exceptional product for customers.

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UNIQUE BUSINESS MODEL WITH DEFENSIBLE TECHNOLOGY AND PARTNERSHIPS

Futurerent has built proprietary technology which allows the company to quickly assess each customer in days rather than months. They draw data from a number of different sources to quickly determine serviceability, in conjunction with rental stability. Their screening technology delivers an incredible user experience, while managing risk appropriately.

On the go-to-market, Futurerent has a dual strategy which embeds their software across the value chain; both direct-to-consumer, but also a partnership model. Futurerent has recently executed a strategic partnership with MRI (the largest property management software in Australia and North America) which will provide access to 4,000 agencies and 800,000 properties under management in Australia.

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RESILIENT BUSINESS MODEL IN A CHALLENGING MARKET

Futurerent has seen strong early traction, with one in five applications funded to date being repeat businesses. The business has seen a 23% average month-on-month growth over the last 6 months.

Despite market challenges during COVID-19, Futurerent has maintained its portfolio returns throughout vacancies and extended repayment periods, with zero losses or impairments to date. Its resilient business model is attributed to its financially literate target market with strong credit profiles and the unique security features of the Futurerent product.

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WHERE TO NEXT

Futurerent has identified that simple access to capital is the biggest barrier preventing property investors from creating wealth, and have developed a solution to fill this gap. By giving property investors the option to use seamless technology to unlock their rent, Futurerent has created a new financing category. We believe that the company’s momentum will continue to grow, and that Godfrey’s vision for reimagining how property investors create wealth will take Futurerent to new heights.

We are very excited to be backing the Futurerent team on their next stage of growth.

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There's a number of open roles at Futurerent, make sure you explore the latest opportunities.