Tech start-up Habito makes £18.5m in in­vest­ment round

The Sunday Telegraph - Money & Business - - Business - By James Tit­comb

EUROPE’S big­gest ven­ture cap­i­tal fund has in­vested in a Bri­tish tech start-up that re­places high street mort­gage bro­kers with an on­line chat­bot.

Habito, which helps home buy­ers find a loan by ask­ing a se­ries of ques­tions and scan­ning the mar­ket, has raised £18.5m in an in­vest­ment round led by Atomico, the Lon­don in­vest- ment firm es­tab­lished by Skype founder Niklas Zennstrom.

The start-up is one of a num­ber of bur­geon­ing “proptech” com­pa­nies hop­ing to un­der­cut tra­di­tional bro­kers and es­tate agents.

Its al­go­rithm has been trained on thou­sands of real-life in­ter­views con­ducted by per­sonal mort­gage bro­kers be­fore be­ing checked by a fi­nan­cial ex­pert, with te­dious ap­pli­ca­tion forms filled in au­to­mat­i­cally.

It does not charge bro­ker fees to the home buyer, which run into hun­dreds of pounds, but makes rev­enue from the stan­dard procu­ra­tion fee paid to bro­kers by lenders. Daniel He­garty, the Habito founder, who is a for­mer Wonga ex­ec­u­tive, said the al­go­rithm pro­duced the wrong re­sult just 8pc of the time, usu­ally be­cause an ap­pli­cant had made an er­ror on a ques­tion.

“We don’t think that hu­mans are good at arith­metic or rewrit­ing forms,” Mr He­garty said.

“The al­go­rithm can ag­gre­gate all the prod­ucts on the mar­ket to as­sess el­i­gi­bil­ity and af­ford­abil­ity.”

Mr He­garty said the fundrais­ing, which also fea­tured Sil­i­con Val­ley in­vestor Rib­bit Cap­i­tal and Lon­don ven­ture firm Mo­saic, would be used to beef up mar­ket­ing with a tele­vi­sion ad­ver­tise­ment, as well as ex­plor­ing other ar­eas such as life in­sur­ance.

Daniel He­garty, the Habito founder, said the cash would be spent on TV ad­ver­tis­ing

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