For many of us, our home is by far our biggest asset, and in the world of fintech, that’s led to a logical extension: when you need money, borrow against that biggest asset. Today, a London fintech called Selina, which provides flexible capital to consumers on five-year terms against up to 85% of the value of their homes — so-called Home Equity Line of Credit (HELOC) loans — is announcing $150 million in funding on the heels of making $100 million in loans out to homeowners.
The Series B equity portion of $35 million is being led by Lightrock, with previous backers Picus Capital and Global Founders Capital also participating. (The latter two firms are tied in part to the Samwer brothers, who also built the Rocket Internet e-commerce incubator in Berlin.) The remaining $115 million is coming in the form of debt from Goldman Sachs and GGC. Hubert Fenwick, the CEO who co-founded the company with COO Leonard Benning, said Selina is not disclosing its valuation with this round, but a source said it is based on standard Series B dilution, which works out to around $140 million.
Selina plans to use the funding to continue expanding its business in the U.K. before considering how to tackle other markets in Europe, which Fenwick called “white space” because of how nascent the HELOC market is there; and to launch more products around its loans business, including a credit card that it will launch this year, which will draw down funds from a customer’s loan to make the funds more accessible.
The U.K. market is ready to be taken and the size is massive,” Fenwick said, estimating the potential asset base for homes in the country at $30 billion. “We need quite a war chest to unlock that, so we think the cash flows will support the U.K. business very quickly, but we also need capital to grow into international markets.”
When we last covered Selina, in July 2020, the company was breaking new ground in the U.K. and had just raised $53 million to provide its HELOC service to SMBs, not individual consumers. Fenwick tells me that consumers were always in its sights, but the company needed to secure regulatory clearance first.
“The real opportunity was consumers,” he said. That happened at the end of 2020, and now 90% of Selina’s business is consumer lending, he said.
In both cases, the gap in the market is the same: People who need capital for a large project, say a building renovation or for educational purposes, might otherwise apply for a loan from a bank, or they might refinance their homes to pick up some extra liquidity. Selina’s HELOC approach differs from these in part because of the speed …….