Investing hard-earned money can be pretty lucrative if you have a hand for it (or a bit of luck), but most lack the experience or time to try and expand their wealth through the stock market. Thus, most simple keep their funds stuffed away in a bank or in a relatively-safe retirement fund. For those with U.K. bank account, British startup LANDBAY aims to offer an alternative by providing a platform for people to directly invest in mortgages.
Those looking to get started with the service are required to create an account, choose their rate (fixed or tracker), and then deposit their funds. Users do not need to select loans to back, as the service automatically diversifies funds across multiple loans, regardless of whether they go for the fixed or tracker rate.
LANDBAY says that they are aiming to protect lenders by ensuring that loans have passed a multi-step process (to weed out fraud and to try and secure a safter group of loans) and by avoiding riskier types of finance, such as developmental, commercial, and bridging. The startup was founded in 2013, but a representative of the company tells me that they carried out a soft launch in April 2014. At this point, the startup reports having roughly 750 registered users.
They have not been live for long, but have already attracted a solid amount of external financial backing. One interesting note with this startup is that they first opted to conduct a campaign on British crowdfunding site Seedrs (a service open to just about anybody interested in investing in a company. Unlike Kickstarter or Indiegogo, backers in this case actually acquire shares). The startup picked up approximately 300,000 pounds through that platform and then, last week, announced a more traditional round, valued at 1.5 million pounds and including participation from Omni Partners, an unnamed asset-management company, and a private angel. The company announced that they would use the new funds to advance towards their next stage of growth.