UK-based Wayhome, a homeownership financing platform, has raised GBP8 million (US$9.96 million) in Series A equity funding, providing the Islamic fintech start-up a cash runway to breakeven point.
The funding round was led by existing funders Allianz X and Augmentum. New investors Volution, Love Ventures and Cur8 Capital also participated in this exercise.
The company intends to build new partnerships with mortgage brokers and lenders in the coming months to aid its expansion. Founded in 2016, Wayhome currently deploys GBP100 million (US$124.54 million) annually in customer property purchases. It believes it can double the figure to GBP200 million (US$249.08 million) per year within the next 12 months with the new funding.
Wayhome previously raised GBP75 million (US$93.41 million) to buy homes in partnership with Allianz GI. In 2018, it raised GBP10 million (US$12.45 million) and in November last year, it concluded a GBP3 million (US$3.74 million) equity crowdfunding campaign at a pre-funding valuation of GBP12.32 million (US$15.34 million). The campaign on Seedrs attracted 602 investors and raised GBP4.37 million (US$5.44 million).
The model
Wayhome adopts a gradual homeownership model which employs the concepts of diminishing Mushrakah and Ijarah and is certified Shariah compliant by Amanah Advisors and the Islamic Council of Europe. It allows customers to participate in a joint purchase and joint ownership of an asset (house), which is then leased and gradually sold to the customer.
“Due to the way that the gradual homeownership model works, the rising interest rates seen since September’s controversial mini budget have delivered even greater demand for our product,” said Nigel Purves, CEO of Wayhome. “With the recent ending of the Help-to-Buy scheme, there are now hundreds of thousands of would-be homeowners seeking alternative ways to access the property ladder.”
The UK is facing a housing affordability crisis as interest rates have surged on the back of the Bank of England tightening its monetary policy in an attempt to rein in inflation.