By Amelia Isaacs on Tuesday 24 January 2023
On a mission to “make home ownership a reality again”, Keyzy is helping key workers and young professionals get on the property ladder.
After moving to the UK and discovering that despite being two young professionals with stable jobs, they couldn’t get on the property ladder, Jeremy Matallah and Simon Groll decided to solve the problem themselves.
Now the South African and the Frenchman have raised £3m to do just that, and to help thousands of others in the UK unlock home ownership as well.
As the government’s ‘Help to Buy’ scheme comes to a close at the end of March, it is serendipitous timing, as Groll told AltFi, that Keyzy has finished up its six-month soft launch and begun onboarding the more than 3,000 people who signed up for its pre-launch waitlist.
“We realized that a lot of people in the UK really value homeownership,” Groll told AltFi.
“It's kind of the British version of the American dream – owning your home – and there's that classic expression, ‘an Englishman's home is his castle’.
“So putting together our experience and the problem that we saw for so many people, especially with house prices always increasing, we thought if we can overcome this problem for ourselves, we could probably overcome it for other people.”
So how does it all work?
The real estate fintech acquires homes which it then leases out to aspiring homeowners on a rent-to-own basis, all while sheltering customers from rent and property price inflation.
Successful applicants are given a budget to find their home, Keyzy then acquires it for them and leases it to them at a fixed rate for three to seven years.
This helps customers establish a credit history to facilitate a future mortgage application, while up to 25 per cent of their rent is converted into the buy-back price of the property.
Customers can then buy the home at the original cost, minus the accumulated converted rent.
“Over the past 12 months, the word has changed quite dramatically, and even more for our customers,” Matallah said.
“There was a huge need for a product like ours 12 months ago when the market rates were at 0 per cent and the economic outlook was great, but still there was this existing problem.
“But now that the market is correcting itself, the need for our product has increased dramatically and we see it in the number of applications we get.”
Matallah said that around the time of the mini-budget in September, there was a turning point for Keyzy in terms of application numbers, which have continued to remain high.
While rising inflation rates made it more difficult for banks to underwrite potential homeowners, by using open banking to assess creditworthiness, the fintech is able to assess affordability more precisely.
Another unique selling point for Keyzy is that it doesn’t require an up-front deposit, something that might prevent one of its core customer groups – key workers – from getting on the property ladder.
“Our solution is really well suited to first-time buyers because the problem we're solving for so many of our applicants is that they don't have the deposit to qualify for a mortgage on day one. And so with the product, they build up savings over time,” Groll said.
Aimed at young professionals that are aspiring homeowners, Keyzy found that around 50 per cent of its customers ended up being key workers with a steady and reliable income that might not have the lump sum to pay upfront.
Because Keyzy buys the property on behalf of the consumer, customers are able to work around this issue.
More than 100 applicants have been approved so far, and Keyzy seems to be well set on its path to becoming a household name for UK customers looking to buy their first home – or castle.
Axeleo Capital and Outward VC co-led the funding round with participation from Seed X and existing investors Global Founders Capital and ActivumSG Ventures.