Fronted, a UK home lending startup founded by former Apple, Monzo and Bud executives, is shutting down in the face of rising capital costs.
The rental deposit lending business raised over £20m in a debt and equity deal led by Fasanara Capital in November. This came after Monzo co-founders backed the fintech in a £1m fundraise in May 2021.
Fronted was set up by CEO Jamie Campbell, formerly of open baking firm Bud, Simon Vans-Colina, previously of Monzo, and Anthony Mann, a former Apple executive.
Fronted's initial premise was to offer a 12-month loan for renters who do not have an existing deposit to buy the property of their choice. The new funding was part of a pivot to develop an app for renters who need to pay a second deposit before receiving the old one from their previous tenancy.
But after a series of repeated interest rate rises to combat soaring inflation, the firm has thrown in the towel. Fronted's Website has now reset to a holding message:
'After an incredible journey together, we’re saying farewell to Fronted.
Thank you for being a part of our journey, your support made it all possible.
-Jamie and the Fronted Team'
In an interview with techEU, Campbell says: “The real reason behind the issue is that in September of last year, our cost of capital went through the roof which really impacted our ability to offer the product at a price that consumers would pay for it.
“We knew that we had good results when customers were paying around about £50 for it, but the shift in the market meant we couldn’t offer it for less than £100, and the price elasticity for our customers just wasn’t there.
“We were never able to go to market with the product that we wanted at the price we wanted.”