British Rent-to-Own startup Keyzy raises £3M to help first time buyers get onto the property ladder

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Article Date
January 24, 2023

Axeleo Proptech 1 sets foot in the UK alongside Outward VC, Seed X, GFC and Activum! We are leading a £3M seed round in the London based Proptech-Fintech Keyzy, tackling one of the most important social issues of the moment in Europe and more specifically in the UK: home ownership. 

Jeremy and Simon, Keyzy co-founders

With its innovative rent-to-own model, Keyzy contributes to ease access to homeownership, laying the foundations of “Real Estate 3.0” in Europe

A central element of our fund's thesis is that technology can help broaden access to real estate ownership. As our peers at NfX have shown very well, after a revolution of information (“Real Estate 1.0” : Zillow, Pricehubble…), of transactions (“Real Estate 2.0”: Opendoor, Casavo, Beanstock…), the third and most critical step of the real estate tech revolution will be that of ownership : “Real Estate 3.0” is a model in which the combined effects of market data and financial technology enable more people to get a piece of the (huge!) real estate pie. This can be done in a variety of ways, through shared ownership (see our investment in Prello), fractionalized investments (see our bet on BRXS), or now, with Rent-to-Own. 

The way Keyzy’s Rent-to-Own model works is simple, you can think of it as “home leasing”: 1/ They give you a budget to find a home you like, 2/ if your application is approved, they buy the property for you, 3/ you move into your home and start saving to ultimately buy it at a fixed price, 4/ a few years later, Keyzy lets you buy the property back at the agreed price or sell it on the market. A 4 steps process with one strong ambition: allowing customers to enjoy the most beneficial aspects of homeownership (get increase in property value, find stability, feel “at home” …) by committing to the asset without going directly through the mortgage process.

Some Rent-to-Own startups in the US have been successful (Divvy Homes, Landis…) and the European market is still open for this kind of disruption. We believe Keyzy is the right candidate to address this, starting with the most appropriate market: the U.K.

Keyzy launches its operations in the UK, addressing a dysfunctional real estate market with a social mission.

More than any other European property market, the UK combines all the characteristics for such a value proposition: market depth, strong demand, lack of supply... This makes renting less and less viable (rental prices have increased by 18% on the past 12 months in London) and results in a struggle for first time buyers. 

The average first time buyer in the UK is now 35 years old (compared with 28 in 2008), and only 27% of Brits aged 25 to 34 own a home (compared to 50% in 1989). Real estate prices have risen 3x faster than income, and mortgages have never been harder to get (500.000 British applicants were refused a mortgage in 2021). On top of that, government support is decreasing, as the government’s Help-to-Buy program stopped taking applications in October, ending a 9-year support program that helped more than 370.000 first-time buyers effectively become homeowners. 

Keyzy approaches this opportunity with a strong social angle. Their offer is particularly suited to key workers (firefighters, doctors, nurses, police officers, teachers…), whose salaries have not increased sufficiently in recent years, keeping them off the traditional mortgage path. Within weeks of launch, their first clients include doctors, journalists, firemen… and even a mortgage broker (a strong proof of concept!). Becoming a homeowner also requires to lock-in a significant cash deposit, which most key workers or young professionals do not have, as well as additional investments to renovate the asset and comply with new carbon regulations. On this point, Keyzy already noticed that some customers tend to use part of the cash that would have been locked in the deposit to invest in their home and create additional value for tomorrow, behaving like homeowners from day 1 rather than careless tenants. These important social aspects resonated deeply with our thesis, especially since the company was led by a dedicated team with a strong founder-market fit. 

Tech & Real Estate - Keyzy's founding team brings together the essential skills to address this pressing issue.

With backgrounds at Blackstone, Roundshield and McKinsey, Jeremy and Simon have what it takes to seize the UK Rent-to-Own opportunity: 

  • A solid understanding of the capital markets and the UK real estate ecosystem, necessary to build strong distribution channels with brokers and agents; 
  • Strong underwriting skills, to effectively evaluate and score potential clients and properties in a scalable manner. On this point, investing in Garantme taught us that smart data sets can be used to score potential tenants and back reliable candidates that would otherwise be out of real estate agents’ scope. This logic can be applied to the home acquisition process, to back young professionals who do not own a reliable bank scoring or have enough cash in the bank. 
  • A B2C mindset, to convince clients to trust them with the most important purchase of their lives, in a competitive market.

With this £3M round raised with top-notch real-estate and fintech VCs, Keyzy now has the resources and time to prove its model. Within weeks of its official launch in England and Wales, Keyzy has already acquired a first batch of properties in Greater London, the South-East, the South-West and Liverpool, and its first customers have happily moved in. The team has generated over 1,000 applications and will be aiming to scale the business over the next year to establish the model nationally.

Congratulations to Jeremy, Simon and the team for building such a disruptive and social initiative. Looking forward to working with you and taking Keyzy to the next level!