Interview with Vadim Toader, founder of Proportunity
In 2016, London-based Romanian founders Vadim Toader, an Oxford graduate and former consultant, and Stefan Boronea, previously at IBM and Booking, launched Proportunity to solve one of millennials’ biggest generational problems: access to homeownership. The timing couldn’t have been better. In the UK, traditional market players have not yet developed alternatives to traditional bank financing, while the government’s “Help to Buy” equity loan scheme – their main competitor in the market – is set to end in 2023.
So far, Proportunity received €130 million in debt financing in Q4 2021, kicking off the next phase of growth. So far, the company has achieved an over £1.5M annual recurring revenue and +200% year-on-year growth in new customers.
In this interview, Vadim Toader shares:
• Which trends are shaping the house market;
• Why they are topping up the Series A round and launching a crowdfunding campaign;
• All about their newest endeavor: getting a bank license to further improve access to home ownership.
The Recursive: What trends are currently shaping the house market and how is Proportunity riding these trends?
Vadim Toader, CEO and co-founder of Proportunity: I think over the last three years we’ve seen an exaggeration of the problems in the housing market. People have started to get bigger homes, as they are working from home more. The appetite for renting together with other people has also decreased. And this, unfortunately, has backfired, as these extra, bigger homes have pushed prices up, while salaries haven’t increased. In the UK, houses are now costing 10 times the annual income, up from eight to nine times income, however banks haven’t changed their lending approach. They still lend an amount five times the annual income. Due to that, there’s more need for products like ours in the market.
Then, for a while, in the UK, we saw a huge demand for houses but very limited supply. Not many people were selling their homes because of the price, and instead chose to invest in home improvements. But now some people are getting back to working from the office. And we’re seeing more homes on the market, even if there is still an imbalance of supply.
We’re also seeing lenders increasing their interest rates in response to inflation, which is putting more affordability pressure on what people can buy.
To summarize all of these trends, people want homes more than ever and, arguably, they want bigger homes, but the financial systems kind of work against that. They’re not really adapting to create solutions for these trends and, if anything, that actually increases interest rates. So, we’re seeing more and more need for companies like ours with problem-based solutions.
Who are you targeting with your solutions?
When we launched, we were more London-focused by choice, because this is where we’ve noticed the biggest problem. Since then, we’ve expanded at a national level. I think now we’re more balanced. There’s slightly more demand for our product than a few years ago in smaller regions in Europe, now that prices have increased. In terms of segments, a key audience are people in their 20s and 30s.
What has been the company’s traction so far?
We’re still at like less than 0.01% of demand. There are so many customers that want solutions like ours and we’re trying to reach all of these people. We’re talking about 8 million people who want to own a house but don’t have the means, and we’ve helped a few hundreds. Until the end of 2021, we helped people buy 60 million pounds worth of properties. Three months later, by the end of Q1 2022, we had helped 100 people buy 102 million pounds worth of homes. This is because we finally had the funding to help us meet demand.
Now we are at the stage where we’re trying to improve our product and go one step further.
You are now raising new funding. Can you tell us a bit more about it?
We are raising a €7 million Series A+ top up round, with a good portion of it coming from VentureFriends, Kibo Ventures, and a number of angels and family offices. In addition, we are opening the round on crowdfunding platforms such as Seedblink Romania for the Southeast European markets. Here, we want to share our success and give friends and families and people that know us a chance to kind of join us on the journey. Then we are also going on a crowdfunding platform in the UK to allow our customers to become our champions. A lot of the time, our customers end up referring us to their friends and this is like a token of appreciation.
We’re doing it as we want to launch a couple of new products and win market share at this crucial time where, in the UK, the biggest product that competes with us, which is the government’s home funding program, is ending in March 2023.
Tell us more about the new products you are launching.
We’re launching a mortgage with 0% deposit. Usually, when you buy a house, the bank gives you four and a half times your income, we give you 100K on top, and then you add the other 5%. This is the typical formula. What we’re doing now is that we are applying to get a license to be the main bank, with the goal to provide the whole loan. This will make a huge difference for customers because they won’t need to invest that 5% anymore.
We are also launching a rent-to-buy solution, whereby we buy your dream house and you can rent it from us until you are ready to buy. With our built-in savings and credit builder features, we want to help customers then become mortgage eligible in 5 years or less.
This is something we wanted to launch since 2018, however, it’s been a ride to bring the product to market. In our field, it’s very tough to innovate, because there are so many stakeholders who like regulations. It takes a long time to get everyone onboard and we had to prove to all debt providers that our investments are safe and our forecasting technology actually works and houses perform well.
Now that we have 250 homes, they can look at their performance, and see that they grew at a rate (6%) double than the average in London (3.2%). Then, people tend to only look at the average, but you also need to look at the distribution. We don’t have any homes with negative growth, even our lowest performing houses are still positive. This is important because our loans are equity loans, so if the house price grows, then our loan values more, and vice versa.
When you have 200 investments and you’ve done this over multiple years, then this brings a lot of confidence to debt providers. Now, they trust us to take on more risk because we have a track record.
How are you supporting the new product launch in terms of internal resources?
Our team grew fast – we were 12 at the beginning of last year, and now we are 32. We hired leadership positions. For instance, we hired Sarah Aird-Mash as VP of Marketing because it’s important for us to also capture the share of mind over the next year. Sarah is the ex-Head of Marketing at startup unicorn Currencycloud and a former marketing leader at Google and eBay. In the UK, for instance, people need to be aware that they have this alternative option to the government financing program, which has stopped. We need to position ourselves as the next go-to-place when you’re thinking about our first home. Then we have had Sreekumar Thaithara Balan and Matthew Froggatt as Head of Data Science and Head of Lending, respectively, for the past four years. I think it isn’t necessarily as much about hiring skills, as it is about hiring people with experience to lead out teams.
What are your plans regarding Southeast European markets?
One way would be to hire more people in the region, as we have quite a good experience with remote teams, especially on the tech side. And we would love to also launch a product and help one person in Europe in a different country than the UK by the end of 2023.
Which are key priorities on your agenda as a founder, when you are not working on the product?
One balance that I’ve been seeking is keeping the status quo performing well, while also innovating. That’s why we’ve been restructuring the teams in terms of leadership positions. Previously, we had a more departmental structure, while now we implemented OKRs slightly better. We realized we needed product leaders to not only respond to the CEO but actually pull in whatever departmental resources are necessary, and this just keeps everyone more focused.
Fundamentally, we’re all working towards a very clear goal. We want every decision we take to lead us to fulfill our vision to make homeownership the de facto choice for as many people as possible. And we are trying to do that for 1 million people by 2030. We’re optimizing everything for that purpose, including our newest product.
PublishedMay 31, 2022
Be the first to know all about tech-trends, European growth, investments, and get exclusive access to all resources offered by our community!
Co-founder of Aqurate
As a startup founder, I am happy to witness SeedBlink’s dedication to expanding their support for early-stage companies beyond funding, towards a healthy equity management via Nimity. A solution to help better navigate relations with stakeholders, employees and future investors is needed in Europe. Less admin work and bringing transparency to the cap table are immediate benefits I was able to test.
SeedBlink is a transparent solution that connects entrepreneurs with great business plans, with investors, at different stages in their development. It is a great tool for us, a democratization of access to funding, I would say.
We really loved the SeedBlink journey. We reached our fundraising goal within hours of launching. About 100 investors joined our vision and invested almost $2 million in FLOWX.AI through the Private Deal Room. At the same time, working with SeedBlink to prepare for the funding round was an excellent exercise for our entire team, and we received and felt the support from the SeedBlink team members who took on an advisory role.
SeedBlink made the (investment) process run smoothly. We appreciate all the support SeedBlink's professional team has provided.
Founder and CEO
It's important to look for and choose a platform that you resonate with, that shares your mission with, a platform & its people with which you feel you can have good working relationships. we got an excellent relationship going forward; we talked a lot and we were in touch on a lot of matters and I think this was important. Having people who believe in your idea is of great help.
Founder and CEO
Running the financing round was like any other fundraising; we had to be active in our community as well as in SeedBlink's investor community. After the launch, everything happened very quickly, and SeedBlink organized several pitch events for investors, which we found very useful for the round momentum.
Founder and CEO
We immediately clicked with the SeedBlink team as their fundraising expertise was immediately obvious and their no-nonsense approach really appealed to us. After all, fundraising is only a means to an end, and we liked how the SeedBlink team was really focusing on supporting us and on getting things done.
Our main expectation has been to raise the amount we were aiming for, and both rounds launched on Seedblink exceeded our targets, so we’re very happy with that! Even though the launched funding campaigns have been purely crowdfunding rounds, we are thrilled to actually receive extra support from some of the investors, who have chosen to get involved and help us generate product awareness, whenever they can.
I am recommending SeedBlink without hesitation, to every founder that raises capital, especially early-stage tech startups. SeedBlink is a crowd investment platform that will also provide their startup with visibility, for Angels and VCs.
Founder and CEO
In the early stages, we have been funded by several early (angel) investors, and one and a half year ago through an equity crowdfunding campaign on SeedBlink. Of course, this impacted our growth in many positive ways, partly due to the cash influx that, evidently, was sorely needed, but in a larger part due to the fact that our responsibility towards our shareholders has become more stringent and explicit, becoming embodied in our market approach.
Co-founder and CEO
Given the accelerated growth we observed at the end of last year and the beginning of 2021, we want a new capitalization, quickly. This is a bridge round that we will use for one year, and the advantages that SeedBlink offers are the speed at which we were able to list for financing and the experience that we gain as a result of this public listing, similar to a listing on the stock exchange.
Co-Founder & CEO
As a platform that only serves technology ventures, SeedBlink can connect the start-up with more than just money. SeedBlink investors are primarily technocrats who understand the objectives of the fundraising company and are also able to post-funding contribute with business opportunities. The minimum investment threshold, and technology focus, differentiates SeedBlink from other fundraising platforms. A perfect fit for a technology start-up seeking intelligent funding.
Co-Founder & CEO
SeedBlink boosted our brand exposure and facilitated the financial support we were seeking. Having a campaign on the platform allowed us not only to meet a team of professionals - that guided and helped us prepare the necessary materials - but also opened doors for increasing our brand awareness and have discussions with VCs & angel investors we have never reached before. This campaign gave us the encouragement we needed to push the product further, while the record-breaking fundraising (only 2 hours from the launch of the campaign!) was a great confirmation that our product is needed in this market and that we should continue innovating.
CEO & Co-founder
SeedBlink has created a vital ecosystem for startups at the beginning of their journey by equipping entrepreneurs with expertise, encouraging honest and sometimes uncomfortable but necessary discussions about risks and vulnerabilities through a suite of tools, and facilitating connections with investors who share the founders' vision and can contribute to their success. I have greatly appreciated the constant support of Eric and the entire team at all stages of the campaign. Thank you so much!
SeedBlink S.A. is registered in the Register of the Romanian Financial Supervisory Authority (ASF), under number PJR28FSFPR/400001, as of 03.11.2022 with an EU passport as per European Securities and Market Authority (ESMA) register of crowdfunding services providers.
INVESTORSInvestment OpportunitiesDirect InvestmentSecondary MarketClub MembershipTestimonials InvestorsPricing StructureLog In
COMPANIESProducts & SolutionsApply for FinancingNimity: Equity ManagementTestimonials FoundersPricing structure