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