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Agencies & People

Online lettings agency wins extra £4m from taxpayer-backed fund and VCs

Mashroom has received funds from private investors, but also Rishi Sunak's £250 million 'Future Fund' designed to help Covid-hit 'pre-revenue' start-ups.

Nigel Lewis

mashroom

Online lettings agency Mashroom has raised a further £4 million from investors including a taxpayer-backed fund, taking its total raise to £7 million.

Mashroom was founded by former venture capitalist Stepan Dobrovolskiy in 2018 and offers its service for free to both landlords and tenants, generating revenue from commission gained from selling financial products.

But Mashroom is best known to agents as the saviour of eMoov, which it bought from the hybrid agency’s administrators in 2019 and runs as its sales arm.

The new cash comes from unnamed private investors along with money from the Future Fund, a £250 million government-backed initiative that offers loans of between £125,000 and £5 million ‘to innovative companies which are facing financial difficulties due to the coronavirus outbreak’.

£250m fund

The fund was announced by Rishi Sunak on 20th April and applies to companies that are unable to access other government business support programmes because they are either ‘pre-revenue’ or ‘pre-profit’.

“Letting and renting is, for the most part, still a fragmented, bricks-and-mortar industry,” Dobrovolskiy told TechCrunch.

“The experience as a landlord or tenant normally still involves a traditional estate agent who acts as intermediary and charges a hefty fee. “While plenty of new players have come along with tech to solve certain points in the experience, we are the first to look at the entire process from end to end.”

As The Negotiator reported last week, Mashroom has launched a service that pays exiting tenants a week’s rent if they host viewings of their soon-to-be former home or film virtual tours.

August 10, 2020

One comment

  1. Funding for Proptech companies can be nothing but a good thing, sadly many really good start ups are cash starved, because of how the system works, grants and loans are often given out, not so much on merit, rather the length of time a company has traded, how much angel investment has been put in, often the larger cash burn you have often with minimal or zero revenue seems not to matter.

    I know of at least a dozen really great Proptech founders who could with a million pounds make a real difference, these same people just quietly grind on, in some ways humbly hoping that someone will realise what they have, whilst some average or below average companies get continual rounds of funding, despite minimal evidence that they are of commercial value. Proptech-PR there has never been more need for us than now.

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