Life as a student and young adult was already hard enough pre-pandemic. Now, the whole “being locked in for months” has put young people in a disadvantageous position that could, potentially, “break a generation”.
Every single aspect of our lives has been affected by Covid, and whilst I sat in my parent’s home for the majority of the last year, making unnecessary online purchases, I wondered if there would ever be a way to Klarna my way out of the home I lived in my whole life.Klarna is a company that aims to make it easier for people to shop online. They offer pay after delivery options and instalment plans in a smooth one-click purchase experience that lets consumers pay when and how they prefer to, whilst enjoying their purchase as soon as they want it.
One day, browsing on Twitter, I found Fronted. It’s like someone could read my mind and see what I was thinking about: “Fronted is a team of people helping renters move into their dream home faster,” says Jamie Campbell, Co-Founder and CEO.
They help people spread the cost of a rental deposit over 12 months, so renters are not faced with a huge upfront cost when moving. According to Campbell, their work is significant because 60% of all renters don’t have access to savings, and many more don’t want to touch their emergency fund to pay a deposit.
He tells me how “lowering the bar to moving to a new house is very empowering – it’s the difference between taking a job or not; being close to family; moving out for the first time.”
When asked about how the idea came about, Campbell tells me how it actually came from his partner. She and her housemates were given notice to move out of their flat but did not have the money for a new deposit at the time.
“What we do is very inspiring work.”
This instance got him thinking that “a lot of people have to rely on the ‘bank of mum and dad’, high-interest credit cards or predatory loans. There was nothing built specifically for this occasion – which took advantage of all the systems built around cash deposits.”
From there, Campbell met with his co-founders and started brainstorming ideas. They each brought their expertise to the table, and Fronted was born.
Campbell recalls how they had a “clear mission and concept” that they tested with potential customers. The research process was very intricate and lengthy, but in the end, they came up with a business plan. And now what? How does anyone go “from idea to reality”?
They pitched the business plan to a few investors; they got their first bit of “seed capital” to hire someone to start building the prototype whilst ensuring they would be getting regulated by the FCA, a financial regulatory body in the United Kingdom.
And then the pandemic hit. “We decided to hibernate the business: no one could move home; everything was up in the air, and there were a lot of unknowns.”
Campbell adds that, luckily, they had a great team of 11 people, who pulled through, and when they started things up again in October, things started falling into place. They completely built the offer, launched it and have helped dozens of people move since then.
“Things just started to click. We started asking ourselves, ‘why are there so few businesses aimed at making renters’ life easier?”
“If you have already found a place you can apply and get your deposit paid within 24 hours,” as the service is “pretty straightforward, and there are two ways to use it”.
Campbell tells me how “most people come to Fronted before they have settled on a property and they want to get a deposit from us before they decide.”
There are a few subtle differences in the product depending on your situation: If you are house hunting, they use your rent budget to calculate the deposit size you might need to request from them. In this case, you have 45 days to use your deposit offer after you have been approved, which is “plenty of time to find the right place.”
The “fancy stuff” goes on in the background: they use transactional data to determine affordability, so they don’t turn people away with thin credit files.
“When customers want us to send the money, we pay the deposit straight to their estate agent. They then pay us back monthly across 12 instalments, plus interest,” Campbell adds.Campbell cannot stress enough how much this business means to him, as he used to work behind the scenes in the tech industry for several years. But he “missed connection with real people” – he was looking for something with a purpose, “where I could see the impact of our actions on people’s lives”.
They are trying to expand their business to something much bigger, planning to introduce features such as “cashback on rent” because it is the “largest monthly payment for young people, so how great would it be to get something in return?”
As of right now, they are new to the game and are trying to promote themselves through their own channels. They rely on people having great experiences with the Fronted deposit and recommending it to family and friends. They would also be interested in introducing “student influencers”, as they “love featuring student stories” rather than their own. They want people to “really use and enjoy the service, not just a sponsored post with a logo on it.”
As of today, there is not nearly enough support for renters despite the huge number of renting properties available. Why is there so much money and investment to support estate agents and landlord, but none for tenants?
Hopefully, more businesses like Fronted will help close that gap and make life a little easier for students or anyone struggling.