RVU, the operator of Uswitch and Confused.com, has bought Manchester-based digital broker Mojo Mortgages for an undisclosed sum.
The deal will see RVU attempt to scale Mojo to handle the traffic coming through its other websites, which average around 15m users in total each month.
Tariq Syed, RVU’s chief executive (pictured above), told FTAdviser it already receives 7m mortgage-related sessions across its website portfolio annually, which also includes Money.co.uk.
RVU intends to convert the traffic its current websites generate around mortgages into sales with Mojo’s technology and industry expertise. The broker currently partners with some 70 lenders.
As part of the deal, which is subject to regulatory approval, all 60 of Mojo’s employees will join RVU. In the long-term, Syed plans to multiply Mojo’s adviser count by “five to ten times”.
“RVU doesn’t need the scale of a bigger company, it just needs the tech to direct these 7m consumers through,” Syed explained, citing “useful” tools such as Mojo’s mortgage scorer for first-time buyers.
“This deal is more about tech than growth,” the chief executive continued. “We need to help Mojo scale up its tech to take on our volume.”
Around 70,000 people use Mojo every month to get a personalised mortgage recommendation. Prior to the acquisition, Syed highlighted the fact Mojo - like many of its challenger peers - was spending too much time “worrying about volume” and “getting distracted by attracting customers”.
“It’s very hard for these scale businesses to digitise a process. And then you’ve got the small businesses that can’t scale. We’re not so big that we’re stuck in our ways, and not so small that we can’t invest in the business,” said Syed.
Mojo was co-founded by Richard Hayes, who previously developed a chatbot which consumers can message to get a quote under the brand ‘Life’s Great’.
“The mortgage market is still quite archaic,” Syed explained. “70 per cent of mortgages go through an intermediary, and of this figure, 75 per cent is offline. Only 2-3 per cent of mortgages in the UK market are end-to-end digital.”
Whilst the general mortgage market is still behind in its digital transformation roadmap, Syed pointed to remortgages, which have rapidly adopted online journeys.
“You don’t need as much advice for a remortgage. Where it’s simpler, we are seeing things moving digitally.”
Like many industries, the UK mortgage market has experienced an acceleration in digital migration due to the global health crisis.
With borrowers no longer going to banks to apply for a mortgage, Syed described current market conditions as “the perfect storm” to grow a platform like Mojo.