Mortgage maven Trussle gets Goldman Sachs backing

Takes total raised by Trussle to nearly £20m

UK online broker Trussle has got £13.6 million in Series B funding from Goldman Sachs and Propel Venture Partners.

The firm shared the news with Sky News first (lucky them) and says Goldman Sachs has agreed to buy a stake in Trussle.

Last month, Goldman Sachs completed the acquisition of Clarity Money to bring over one million customers to its online lending platform Marcus.

Marcus is also coming to the UK retail banking market (as unveiled by Goldman Sachs last autumn), stating with savings and deposits. It is going to be a greenfield site, although Goldman Sachs does not exclude a possibility of buying an established book of deposits, if the opportunity came its way.

So, its UK ambitions are clear.

Meanwhile, another recent investor in Trussle – Propel – is, too, a big name as it is backed by Spanish banking giant BBVA, which owns a large stake in the UK’s Atom Bank.

Trussle was founded by Ishaan Malhi, whose work history includes a stint as mortgages analyst at Bank of America Merrill Lynch.

As is often the case in fintech, he trots out the usual lines about frustration.

“Every year, millions of current and aspiring home owners are subject to the same unnecessary costs, delays, and frustration that I experienced first-hand when trying to get a mortgage,” Malhi told Sky News.

‎”These industry shortcomings are causing people’s dreams of owning a home to slip further away.”

‎And, as with open banking and payments around the world, regulators want more competition and innovation. The mortgage sector is no different.

In a statement last week, Christopher Woolard, director of strategy and competition at the UK’s Financial Conduct Authority (FCA), said: “The mortgage market is one of the largest financial markets in the UK and there have been significant changes to the market since the financial crisis in order to ensure that we do not return to the poor practices of the past.

He added: “For many the market is working well with high levels of consumer engagement. However, we believe that things could work better with more innovative tools to help consumers.”

The FCA estimates around 120,000 British mortgage customers would benefit from switching provider.

Trussle has been making good progress. This latest fundraising comes about 16 months after it attracted £4.7 million from other investors, such as Seedcamp and LocalGlobe.

In total, the new round will take the sum raised by Trussle to nearly £20 million.

The company declined to disclose to Sky News the valuation attached to it following the fundraising.

It also remains vague about other measures of its financial performance, although it says it has experienced month-on-month growth of 25%.

Malhi says he has set a target of providing as many mortgages as one of the six largest UK lenders – including Lloyds and Royal Bank of Scotland – within three years.

Inertia’s end

As reported in January, Trussle launched its mortgage monitoring service to homeowners across the UK.

Trussle says its free service monitors over 11,000 of the latest mortgage deals from more than 90 lenders across the market.

The service compares these deals with the borrower’s current deal each day, taking into account fees, incentives, and any applicable early repayment charge (ERC). If it calculates that savings could be made by switching to a new deal, Trussle will automatically alert the borrower and guide them through an online remortgage process.

The firm says: “Switching inertia is a major issue in the mortgage sector, so the service has been designed to prevent mortgage borrowers from unintentionally slipping onto their lender’s standard variable rate (SVR) – a default product which typically has a much higher interest rate – when they reach the end of their mortgage deal’s initial period.”