Zero Deposit, the alternative tenant deposit scheme being set up by former ZPG commercial director Jon Notley has received a second round of funding taking the total invested so far to £5 million after it secured commercial and partnership deals with insurer Munich Re and ZPG.
Zoopla’s parent company ZPG initially invested £250,000 in Notley’s start-up in May, a month after Notley was appointed as a director of Global Property Ventures, the Stevenage-based company behind Zero Deposit.
Jon Notley (pictured, left) is joined at the start-up by Simon Embley, the former CEO of Your Move, and Gavin Wiseman and Ben Austin, both serial start-up entrepreneurs and co-founders of removals comparison website Buzzmove.
The new investors backing Zero Deposit are Grenville Turner (pictured, right), the former CEO of Countrywide and JamJar Investments, who set innocent drinks and now also back deliveroo and graze. The two other investors are Vanneck Ltd and KM Capital.
Such early and high-profile funding is unusual to say the least partly because start-ups normally need to at least launch before receiving a second round of funding.
Zero Deposit, which says it will pay agents referral fees, currently features a holding page inviting tenants to register their interest, although Notley says a launch is expected later this year.
“We are bringing together an industry wide team of partners and investors and we are due to make further announcements in the coming weeks as we continue to build and prepare for our launch expected later in 2017,” he says.
Grenville Turner, who is also a non-exec director of ZPG, says he had been “hugely impressed by the work that the Zero Deposit team has done so far and with the partnerships that they have formed.
“Rental affordability is a big issue and Zero Deposit have developed the right solution and we look forward to supporting them as they come to market.”
Zero Deposit claims to be an alternative to both traditional deposits and the three government-approved tenancy deposit schemes because it offers tenants a cheaper to way to pay landlords a deposit, while also giving landlords peace of mind.
Tenants pay a non-refundable sum equivalent to a week’s rent and in turn do not have to pay their deposit in cash. The insurance policy runs for the term of the tenancy and costs the tenant £25 in admin fees each subsequent year.
The scheme is backed by insurers Munich Re and, should a dispute arise between tenant and landlord, the case is then referred to an independent adjudicator and any monies due passed to the landlord, if the adjudicator finds in their favour.
“We invest in businesses that are destined to grow by improving the lives of consumers,” says Richard Reed, a co-founder of JamJar Investments (pictured, left).
“By hugely reducing the amount of money renters need to pay up front to secure their new pad, Zero Deposit is bringing much-needed reductions to the costs of renting a property.”