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Proportunity is embarking on a mission to make 1 million people homeowners by 2030!
For millennials and Gen Z in the UK, renting has now become the new norm. Since 2003, when the homeownership rate was 70.9%, the percentage of homeowners has been declining. By the end of 2022, it’s predicted to be as low as 65%.
Proportunity, however, believes it doesn’t have to be this way. The tech-driven platform, which was ranked among the top 10 UK mortgage lenders, has increased hundreds of borrowers’ down payments so they can buy a house.
Now ready to scale operations, they’re currently raising investment on our platform. We’re delighted to say that Proportunity has exceeded their initial target and is now overfunding!
We thought this would be a great time to bring you in on the Proportunity story with an interview from co-founders, Vadim Toader and Stefan Boronea.
We’d love to know about your careers before Proportunity and how you first came across the vision to build the business.
Vadim: I’m an engineer at heart, and the son of two engineers and entrepreneurs. Originally from a small town in Romania, I studied Engineering with Economics & Management at Oxford University. I then went into Strategy Consulting at Bain & Co, where I spent most of my career advising financial companies on growth.
Despite earning more than the national average, mortgage brokers told me I was still £100k short for my mortgage. That got me thinking about building a solution that could help other home buyers out there just like me. I then met my partner-in-crime and fellow co-founder, Stefan, and we put our heads together to build Proportunity.
Stefan: My career always revolved around technology and its use to make people’s lives better. I fundamentally believe that technology can have a positive effect, especially when it comes to industries that are reluctant to change.
I started my career in R&D, but whilst it’s intellectually challenging, it takes too long to see an outcome. As a result, after graduating from a Masters in Artificial Intelligence programme, I transitioned to more practical applications of science and tech. I worked at larger organisations such as IBM and Booking.com in various leadership roles.
Corporations however, also lack urgency, and therefore I decided to move to London and join Entrepreneur First for a more fast-paced experience: entrepreneurship. That’s where I met Vadim, who had a crystal clear vision and a laser focus on using technology to understand the real estate market. Working together was one of the best decisions I’ve made, as we complement each other’s skills very well and his drive and passion are unrelentless.
What is Proportunity and what problem are you solving?
Proportunity is a mortgage lender that combines technology with financing to break the barriers to home ownership to help people buy sooner and buy smarter.
With housing prices on the rise, and UK homes costing £274,000 on average, the way we buy a home today just doesn’t make sense. Home buyers are limited to borrowing just 4.5x their income when homes are now costing upwards of 9x income!
Unless you have the Bank of Mum and Dad, it’s near impossible to save for a large enough deposit while renting to make up that difference between what you can borrow from a main mortgage lender and the home you want to buy.
Everyone should have access to home ownership, it shouldn’t be a privilege. We’re fighting for those that are working hard to save, but can’t reach their goal because of the systemic limitations that are completely out of their control.
This is where Proportunity comes in. We boost deposits up to as much as £150,000, but not only that, we’re helping people buy smarter by identifying undervalued homes with our proprietary machine learning tech through our platform, the Proportunity Home Index (PHI).
With the government’s Help to Buy scheme ending next year, the need for more support is now greater than ever. Proportunity has been around and will continue to stick around to innovate and build solutions for tomorrow’s home buyer.
How is Proportunity different from other products and options in the market?
We’re not just a mortgage lender, we use a predictive algorithm to mitigate risk for our home buyers. Our user-friendly platform, Proportunity Home Index (PHI), shows our home buyers whether or not they are making a sound purchase.
We have a team of dedicated data scientists that work tirelessly to continue to improve our PHI algorithm.
A shared equity loan is a viable solution because it allows the home buyer unlock equity to finance their home purchase. In combination with our tech, Proportunity home owners can be assured that their home has the highest growth potential to reduce risk.
Tell us more about the machine learning side of the business, and why you see this as such a gamechanger in the offering.
Mortgage lending is an archaic industry that looks at risk as a one-sided problem – relating to only the buyer – while ignoring the risk for the property being bought. We use large datasets to understand the growth for each property and quantify the factors that are influencing that growth throughout time such as crime rates, green spaces, and transport links.
This allows buyers to have a better understanding of why they would expect a higher growth for one property (or neighbourhood) over another.
If you were buying your first house right now, where would you look and why?
Stefan: That’s a great question as I’ve recently bought my first home with Proportunity.
The flat is in an up-and-coming area with a lot of green space, it’s below the market price compared to similar properties and it’s seen constant investment within the last few years.
Each customer that ends up buying with Proportunity has its own idea of what the perfect neighbourhood and property are. The advantage to our technology is that it’s designed to find the property needles in the housing market haystack, giving its users a number of options to choose from.
For example, I like areas with green space that have good connections to Central London, but aren’t that hectic. Anywhere within walking distance from a park, especially after the pandemic since I sometimes work from home, is key for me.
Why are you looking to raise at this point in time, and why is it such an exciting point for the business?
We love what we do and being able to have a direct impact in helping another person, family, or couple achieve home ownership when they didn’t think it was possible. How incredible is that?! To be able to improve someone’s livelihood, give them the confidence in their home purchase and to call themselves a proud homeowner!
We know we’re not the only ones that want to revolutionise the mortgage system. Our crowdfunding campaign gives anyone a chance to even the playing field to create a fairer and more accessible path to homeownership.
We are currently developing two exciting new products so the investment from our crowdfund will directly contribute to launching these products to market faster.
What new products are you looking to introduce?
First, we plan to launch our very own 0% deposit mortgage, which removes the biggest barrier to homeownership: saving for a deposit.
Secondly, we want to become the pathway to home ownership for renters who aren’t mortgage ready just yet. That’s why we’re launching our “Rent to Own” product, which will free customers and allow them to rent until they are ready to buy. And not just that, but part of their monthly rent goes into their mortgage deposit, helping them save for a better future while simply renting.
You have some fantastic institutional investors on your cap table, including Anthemis, Venture Friends and Kibo Ventures. How does it feel having them validate the business, and how useful have they been since they joined your journey?
Our investors have been essential in realising our vision for Proportunity. We’re honoured that we were chosen among thousands of companies they could invest in. They saw the potential in us and the huge opportunity that lies in the housing market. Their investment, connections and advisory have all been paramount to giving us the fuel to help the hundreds of home buyers to date.
Aside from building business and revolutionising the home ownership space, what do you enjoy doing in your free time?
Vadim: Ha! What free time!? As a fairly new father, I spend the time I have with my two babies – Proportunity and my family. Occasionally I indulge myself in an episode or two of the Mandalorian. I also love getting away from the city and going for a long drive.
Stefan: Revolutionising home ownership takes most of my energy, but nature recharges my batteries, so I usually tend to be out and about cycling or walking in a park or a forest whenever I have some spare time.
What’s the biggest lesson you’ve learnt so far building Proportunity?
Vadim: Despite my need to get things done fast and immediately, I’ve learned that some of the best ideas take time to get there and you can’t do it without great people. Having a passionate team that sees your vision is integral in collaboration and having the unwavering drive to take our company to the next stage.
Stefan: It takes time to create trust, it takes a second to lose it. Every single interaction with a potential customer, employee or investor could be the first or could be the last. It’s important to be consistent and diligent throughout and consider each interaction as an opportunity to improve that trust bond. With everything being more digital these days, it’s easy to forget that there’s a person at the other end of that interaction, even if that’s an email.
Proportunity is a great opportunity to invest in a company that puts people first. Their team is passionate about their mission, and they have a solid business plan with an impressive track record. Want to be a part of their story? Visit their campaign here.