Perenna raises $52 million in latest funding round to establish a new financial infrastructure in the UK
Perenna, a new bank with a mission to structurally change the UK mortgage market, has secured a further $52 million equity investment that will see the business roll-out its long-term fixed rate mortgage products. The latest funding round is another significant milestone in the business’ launch following the recent approval of its UK banking licence.
The successful fundraise was led by Perenna’s strategic investor Silverstripe Investment Management, with participation from others existing investors, and brings the total amount raised to almost $90mn since 2020. This is despite challenging conditions in the wider early stage funding market, highlighting the opportunity investors see in being able to disrupt the current UK mortgage market.
At the heart of Perenna’s innovative approach is a unique funding model that, rather than relying on retail deposits, is powered by the issuance of covered bonds that unlock access to the UK mortgage market for institutional investors seeking long-term stable income.
Similar models are widely seen in other European markets such as Denmark, but Perenna is the first of its kind in the UK. Through offering long-term fixed rate mortgages the business is able to tackle a range of structural homeownership challenges, from first time buyer affordability, to mitigating the impact of interest rate volatility and increasing choice and flexibility in later life.
Proceeds from the fundraise will see the business launch the Perenna Mortgage, offering 20-30 year fixed rate products, to a 5,000 + waitlist. Eligible waitlist applicants will be invited to apply over the coming weeks with the business opening up to the wider public later this year.
Arjan Verbeek, CEO and Co-Founder, Perenna comments “This successful fundraise, set against the backdrop of a challenging fundraising market is a clear testament to the strength of our unique approach and the significant opportunity to reimagine the structure of the UK mortgage market.
“With over £3tn of investor monies having no efficient access to the UK mortgage market, our covered bond platform will unlock this, enabling them to generate sustainable risk-adjusted returns whilst also delivering better outcomes for homeowners across the country.”
Hamish Peacocke, CCO and Co-Founder, Perenna comments: “The UK is a clear outlier when compared to other advanced economies like the US and Denmark. The market is in dire need of reform at a time when homeowners are battling a range of challenges, whether that be first time buyer affordability, those remortgaging in a higher rate environment or those looking for greater choice and flexibility in later life.
“Our unique covered bond funding model can play a huge part in this reform. By establishing a funding platform like ours, there’s a huge opportunity for us to transform other international markets where similar structural problems exist. The UK is the perfect first step.”
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