Our Investment in Habito — bringing mortgages into the 21st century
We believe that trusted robo-advisors have a bright future. When it comes to supporting financial decisions for the average consumer, technology can deliver far superior advice than a human-powered service. With wealth management as the initial target for robo-advice — and Wealthfront and Betterment leading the charge in the US — who might be next in the firing line?
We believe software is going to start eating into the brokerage world, starting with mortgages. Selecting the right mortgage is one of the most important financial decisions in a person’s life — it is by far the biggest liability on their personal balance sheet, and servicing it is the largest household expense annually. Yet the consumer experience to find and apply for a mortgage has remained almost unchanged over the past 20–30 years in most markets.
There are over £250 billion of mortgages originated in the UK every year. It is also one of the most sophisticated consumer finance markets in the world, with over 15,000 mortgage products available. As such, it’s impossible for a single bank or a traditional mortgage broker to offer a comprehensive selection, and the research shows people often end up with the wrong mortgage for their situation. Overall, the process is confusing, time-consuming and unnecessarily complex.
Habito is going to change all of this. It’s on a mission to bring mortgages into the 21st century, standing side-by-side with its customers as they navigate one of their most impactful life decisions.
We are proud to have partnered with Daniel Hegarty and the habito team on this journey. Daniel is the archetypal entrepreneur that Mosaic loves to work with — a smart, highly-driven renegade, who would probably still be playing guitar on tour if he had not stumbled into the world of fintech 9 years ago. He earned his stripes at Wonga, the original fintech pioneer, where he figured out how to learn from user interactions with web-based financial services to build a killer product. We were also fortunate to convince a few of our favourite entrepreneurs to join us as investors in habito — Samir Desai (Funding Circle), Taavet Hinrikus (TransferWise), and Paul Forster (Indeed) as well as also Tom and Yuri from DST.
With habito, the mortgage broking industry is set to be revolutionized, first in the UK and then beyond. After that? Our evolving thesis is that insurance and pensions are target-rich environments for robo-advice — for example, we like emerging companies like Next Insurance. But that’s the subject for another post…
Additional Recent Posts from the Mosaic Ventures Team:
Trust in a Robo-Advisor World — Martin Ford’s “Rise of the Robots” is one of the most provocative books I’ve read in the past 12 months. As a “glass-half-full” VC investor, I don’t often enjoy pessimistic visions of the world, but Ford makes strong arguments about the prospect of a jobless future. He rejects Panglossian futuristic visions with well-researched insights into the next cycle of automation, driven by both specialised and general artificial intelligence, which he believes will affect huge swathes of the global economy….Read More
Our Investment in Blockstream — Mosaic recently participated in the $55M Series A financing for Blockstream, an unusual start-up founded by a group of idealists with a cypherpunk-inspired vision of revolutionizing the world of money, assets and contracts. The round was led by Li Ka Shing’s Horizons Ventures…Read More
Where is all the innovation in insurance? Let the capital flow. — A giant and heavily regulated industry which many would argue has lost sight of its customers should be ripe for attack. After all, entrepreneurs are tackling some of the toughest challenges in sectors like healthcare, transportation and financial services, using software to radically transform the product offering. Yet insurance has been overlooked, protected by large capital requirements and regulatory complexity…Read More
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