Reposit, the company changing the way landlords, agents and tenants handle deposits, announces today its partnership with Lloyd’s of London insurer Canopius and a new £500,000 funding round. The London-based InsurTech firm which created the growing deposit replacement sector in residential lettings, provides tenants with an alternative to the standard tenancy deposit. Reposit eases cash flow problems for renters by enabling them to secure a property with just one-weeks rent.
This round of investment is backed by investors, including Andrew Weisz of Weisz Investments and Michael and Simon Blakey of Avonmore Developments. The new round brings the total amount raised to date to £950,000, and will be used to scale the team and business, across the UK rental market.
Founded in 2015 Reposit was the first of the new age of ‘deposit replacement schemes’. Tenants purchase a Reposit with one weeks rent, plus an annual fee of £30 should they stay for more than one year in the property. The Landlord becomes a named beneficiary on Reposit’s insurance policy and is protected for up to six-weeks rent, for anything a deposit would have covered.
Market research data of 1,000 tenants, collected by Reposit, found that 91 percent of tenants have paid a deposit, with 49 percent claiming they borrowed the money to fund it from either family, loans or even payday loans. For people moving between properties, they are expected to provide the deposit for the new contract before an old deposit has been released, causing cash flow problems and added stress, among other issues. For the landlords, Reposit learned that 61% were initially worried by tenants being covered by insurance, the fear was that they would lack ‘skin in the game’, leading to further damages, rent arrears and cleaning costs. Reposit’s data shows that the structure of its product offering actually improves behaviour in comparison to tenancy deposit deduction statistics.
Reposit’s CEO and Co-Founder Jude Greer, commented: “Everyone at Reposit has been a tenant and has felt the pain of trying to claw together a tenancy deposit to move into a new property. Paying for one deposit, and waiting for an old one to be released, really highlights a cash flow issue for a lot of people, and there is £4.5Bn of dead cash sitting in tenancy deposit schemes. Cash that could actually have a massive impact if made available to tenants again.
“We also understand that landlords require security and commitment from tenants which influenced how we structured our solution and moved away from a traditional insurance product that would indemnify a tenant, increasing the moral hazard risk. By easing the burden of a six week deposit, we’re speeding up an entire process and helping more people rent property quicker. A win-win for all involved.”
Reposit paved the way for a new market of Tenancy Deposit Alternatives, and is the most experienced business in an increasingly populated sector. To date, Reposit has saved its users £1.3m on deposits.
Earlier this year the team decided to take the product offline to focus on improving the service, working with the FCA Innovation Hub and analysing claims data whilst also taking the opportunity to welcome Lorraine Mullins, former Global Chief Compliance Officer at XL Catlin as Head of Compliance. Reposit has since re-launched in partnership with Canopius Managing Agents Limited, the global specialty (re)insurer and one of the top ten insurers in the Lloyds of London market.
Greer added: “Whilst numbers were fantastic and both landlords and tenants were happy, the market has become more competitive. We made a strategic decision to pause and work on our product and offering, analysing the check-out and claims data of our initial tenant customers. Efficiency in dispute resolution and the check-out for all parties involved, will be the key area where our sector is judged. Having had hundreds of tenants leave properties via Reposit for just over a year now, the learnings we’ve made and improvements to the system are invaluable.”
Andrew Weisz of Weisz Investments, who has re-invested into Reposit said: “Having worked with Reposit over the last two years I was happy to have the opportunity to invest again as the business begins to scale. As the UK government increasingly focuses on the efficiency of the private rented sector, deposit replacement is rapidly coming to be seen as a key area of innovation. Reposit are ideally positioned to succeed in this space. ”
In addition to investment, Simon Blakey, Partner of Avonmore Developments has joined Reposit’s board. He commented: “Reposit is being lead by two strong and capable Co-Founders, Jude and Brendan, who are focussed on doing right by their customers and for the industry. The deposit replacement scheme space is still very new, and their passion and customer-centric approach will be key in ensuring they remain a market leader. We’re proud to welcome them into Avonmore Development’s portfolio and believe in the team to deliver on its vision.”
With over 200 agencies in the UK now using the service, this latest round of funding will allow Reposit to bring on new talent and create further products for its customers. For more information go to www.reposit.co.uk