Trussle has secured a £13.6m series B investment from investors including Goldman Sachs and Propel Venture Parnters.
Does any business boast so promising an arsenal of fintech investments and projects as Goldman Sachs? The preeminent investment bank yesterday added another item to its store: a stake in UK-based digital mortgage broker Trussle.
Trussle is a fintech firm focused on making the process of getting a mortgage fairer, faster and more transparent, through the application of technology. Founded in 2016, the company has grown from 14 to 70 people since its last fundraising round in February of last year.
Now, the platform has clinched £13.6m in a series B round led by Goldman Sachs Principal Strategic Investments and San Francisco-based Propel Venture Partners. Also along for the ride were Finch Capital (which led its series A round) and Seedcamp.
For Goldman Sachs, this is the latest in a string of aggressive moves into the fintech sector. The bank acquired US-based personal finance management firm Clarity Money in mid-April (you can read my thoughts on why here). It is powering ahead with its online deposit and loan platform Marcus, which, according to its latest quarterly earnings report, has already surpassed $3bn in loan originations. In late 2017, it invested up to £100m of debt and equity capital in Neyber as part of an extended series C round. Neyber is a fintech which specialises in loans as an employee benefit, with repayments deducted directly from borrowers’ salaries.
In Trussle, Goldman backs a self-professed ‘consumer champion’. Last year, the company launched a continuous mortgage monitoring service which constantly monitors the market and alerts consumers to money-saving switching opportunities. It has been lobbying government to introduce a Mortgage Switch Guarantee, which proposes new industry measures to offer more protection to customers when switching.
This is what Philip Aldis, managing director at Goldman Sachs, said of the bank’s latest investment: “Trussle is at the forefront of revolutionising the UK mortgage market, making it more efficient and convenient for consumers to find the right mortgage. We look forward to supporting the company’s ambitious growth plans.”
According to Trussle founder and CEO Ishaan Malhi (pictured), the series B money will be used to invest in building the company’s brand and product and to accelerate the realisation of its vision of ‘digitising the end-to-end journey to make home ownership more affordable and accessible to all’.
Asked whether taking money from Goldman has in any way altered that mission, Ishaan Malhi said: “No, it doesn’t change the mission at all. If anything, the mission is what we need investors to align on for us to consider taking money from them.”
In an interview with AltFi, he pointed out that Goldman Sachs has invested in a similar business in New York by the name of Better Mortgage. Better Mortgage differs from Trussle in that it lends money, rather than simply scouring the market for the best deals from other lenders. “But there’s a parallel in that both have identified inefficiencies in the market,” explained Malhi.
Given all that Goldman itself is doing in fintech, what’s its rationale for backing Trussle? Is it a simple venture investment, or does the bank have strategic designs for the company?
“You can never say how things will pan out, but we’re certainly taking money from them as a venture investor as we would from any other fund,” said Malhi. He added, however, that he wouldn’t rule out a strategic interest ‘down the line’.
As for how Trussle fits within Goldman’s ever-increasing collection of fintech interests, Malhi pointed out the sheer size of the bank, likening it to Google. Aldis, the Goldman MD who led the investment in Trussle, is responsible for mortgage structuring and strategy across EMEA. “It’s really that team that we’re interacting with,” said Malhi.
He added that the appetite for innovation across Goldman as a whole is 'clear to see'.
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.