Savings app for first-time house buyers Nude is raising £3.5m
Nude, a UK fintech offering first-time home buyers a savings account, is raising £3.5 million in a seed funding round.
The Glaswegian start-up is securing capital on Seedrs, a London-based equity crowdfunding platform.
One of its co-investors is the government’s Future Fund, which matches investments in UK start-ups through convertible loans.
The fintech has already completed 97% of its £3.5 million target, which went live on 6 July. At time of writing, Nude had raised £3.4 million from 428 investors.
The funding adds to its £1.7 million growth capital raise last year, and its innovation grant from Scottish Enterprise.
Founded in 2017, Nude says it is “building the foundations for a new kind of bank”.
The start-up confirms its aspirations to apply for a UK banking licence to launch its mortgage products.
Later down the line, the start-up will look into offerings around weddings, children’s accounts and retirement too.
It has already delivered its beta app to 1,000 early testers. The start-up’s target group is the roughly 13 million 18-35-year-olds who have the aspiration of owning their own home.
Initially, the fintech will make money by taking a share of the interest earned on the savings it helps users accumulate.
Once Nude lands its banking licence, it can then earn fees on the self-built mortgages it offers customers.
“The challenges facing young people are huge, with a massive wealth imbalance, a complex financial system and little help,” says CEO and founder, Crawford Taylor.
“We’ve been planning, testing and building Nude to make the financial world fairer and easier, starting with helping people buy their first home faster and easier than ever before.”
Other revenue avenues
On its Seedrs page, the start-up highlights other potential revenue streams. It says it could build a marketplace model on which it would earn commission.
This would be a good solution in the interim whilst the fintech applies for its licence to offer its own mortgage products.
It also envisions licencing parts of its proprietary technology in a platform-as-a-service model.
This is similar to what UK challenger OakNorth is doing, having recently announced various licence partnerships with US banks.
As for geographic expansion, Nude says its business model – like many fintech start-ups – is scalable abroad. Though it does not say which countries it envisions scaling to.