Mortgages  

US firm enters UK mortgage market with Trussle buyout

US firm enters UK mortgage market with Trussle buyout

Trussle has become the second digital mortgage broker in the UK to be acquired by a US entity this week.

Better, a stateside digital mortgage broker, intends to enter the UK market through its latest purchase.

The acquiring firm values the British homeownership opportunity at £1.5trn. It intends to tap these coffers and replicate the growth of its New York-headquartered business, where it has raised more than $400m (£340m) in equity capital since its inception.

Trussle landed £26.7m back in January 2020 from backers including Goldman Sachs and Finch Capital, but Financial Times sources suggest it is now being sold for just $9m (£6.5m).

Vishal Garg, Better’s founder and CEO, described its overseas counterpart Trussle as a “kindred spirit”. When his team researched the UK market, he said they “were surprised” to see how ripe the home financing market still was for disruption. 

“[Trussle] has developed a platform that we can work alongside to help every Briton own their own home,” he said.

Founded in 2015, Trussle - which is a year older than its acquirer - provides advice to consumers looking to buy a home, refinance an existing mortgage, or buy protection. It works with around 90 lenders to close mortgages sourced via its platform.

In the last 12 months, the firm claims to have sourced around £1.1bn of mortgage approvals, 41 per cent of what it has sourced overall since 2015.

This is compared to Better, which claims to have funded $30.9bn (£26bn) in home loans and provided more than $7bn (£6bn) in cumulative coverage through its insurance divisions.

In a release announcing Trussle’s acquisition, Better cited its “experienced management team, local knowledge and foundational mortgage technology” as reasons for the deal.

Better said it intends to boost Trussle’s revenue profile by developing a pipeline of business-to-business relationships with estate agencies, property developers and financial services companies.

It will also invest in customer acquisition, and drive attachment rates across product offerings, including insurance and conveyancing.

Similarly, US-backed entity RVU bought Mojo Mortgages this week - another UK-based digital mortgage broker - in large part for its technology, with the vision to scale it post-deal.

RVU, a European business set up by South Carolina-based media company Red Ventures, also owns Uswitch and Confused.com.

Tariq Syed, RVU’s chief executive, told FTAdviser: “This deal is more about tech than growth. We need to help Mojo scale up its tech to take on our volume.”

Like Mojo’s move to RVU, Trussle will also see its entire team migrate to Better. Ian Larkin (pictured), Trussle’s chief executive, will continue to head up the digital mortgage broker following the acquisition.

“The UK mortgage market is still characterised by analogue systems and processes,” said Larkin, who is confident Trussle’s acquisition by “a large and growing international organisation” is how it will further disrupt the UK market.