Payaca: the fintech startup revolutionising the way homeowners renovate & reinvest

Four million households have chosen to renovate their homes since 2013, with the number of renovations increasing 5-fold in that short timeframe. Research shows that staying put and upgrading your house is often more straightforward, and more economical than moving. There aren’t enough new UK houses being built to cope with demand, particularly family homes, with more living space. The dominant trend is now to extend what you already have. Of course, many choose to upgrade their home as an investment too; research by Hiscox shows a new kitchen can lift a home’s value by as much as 10%. A new bedroom could boost the average home value by 11.2%, or £25,383.

Bristol-based fintech venture Payaca makes house renovations easier and more accessible than ever before, enabling thousands of homeowners to match with affordable lending deals, as a specialist platform for home improvements. The Payaca platform strips out the complexity and does most of the lifting for you, finding competitive quotes, starting from 2.9% APR. Their lenders run soft credit checks only, so getting a free quote won’t affect your credit rating. A quote can be approved in just two minutes too, which means funds can be with you on the same day. “Our aim is to provide simple, fast, finance,” says founder and CEO Matthew Franklin. “We find the most trusted finance options to help tradespeople and homeowners work together.” Importantly, the process is streamlined, so that users aren’t jumping through repeated administrative hoops, or finding fresh surprises, after receiving the quote, as you might if using a mainstream comparison site. Payaca and the lenders are seamlessly integrated.

One important additional innovation is how Payaca helps smaller independent businesses to quote for renovations through the platform, bringing transparency, trust, and speed with it. The full renovation package can now be presented and fully costed to include finance, which helps builders to secure more jobs, more quickly. Payaca sees itself as a financial enablement platform to make it faster, simpler and cheaper for builders and consumers to do business together. Almost 500 businesses have started using it in its first 6 months.

Matthew Franklin’s story as founder began with a career in data science, after which he launched a tech startup, where he resided as Product Manager,  in the home improvements space (which was integrated with a larger company). He sees widespread problems in the market, and opportunities to challenge them with new digital solutions, that save time, hassle and direct costs. Lenders don’t know how to reach customers in this space, so they too needed a helping hand, benefitting from the dealflow generated by his platform.

Payaca as a young and ambitious business, is now raising a second round of Angel investment to fund its growth and product development, having run lean for its first 18 months, while proving out the value proposition. They are using SeedLegals to simplify the investment process, and navigate the legal requirements. With SeedLegals, as with Payaca, the documentation and agreements are all done online; the process has been designed to be much simpler, cheaper, and streamlined, through digitisation.

“I have used SeedLegals since the start, as they have standardised the investment terms, with transparent agreements”, explains Franklin, who used a SeedFAST Agreement to get the business going. He sees this new technology as being advantageous for founders, who can now create their own fair and balanced legal documents online, following a step-by-step process, and send them out to new investors when they are ready. It cuts down on lawyers’ fees, and cuts out to-and-fro negotiations. A lead investor would otherwise be inclined to press their preferred terms on a new business, initiating negotiations through their lawyer – this often requires some push back, now involving two sets of competing lawyers on hourly rates. Cutting out the tug-of-war saves both sides significant time and legal fees. 

“The legal process has been made really clear”, notes Franklin. A plain-English explanation of common startup funding terms is available when building term sheets. With founders now initiating and running the seed funding process online, it changes the power dynamic when it comes to investor negotiations too. “Negotiating the first Angel round was actually very easy” recalls Franklin. “If SeedLegals don’t already have a specific term available to select on the system, it’s probably not a necessary or attractive term for a startup to include”. The platform provides benchmark data on what terms are ‘normal’, including company valuations, to help educate users, and help negotiations run more smoothly. Any abnormal change requests can be sense-checked quickly.

“If you do need bespoke help, they are very helpful. You can get on the phone and they will provide as much help and advice as needed. We’ve been using all of their legal docs, all the way – this has been a huge weight off my mind. Not only are all the documents lined up, everyone sign them remotely”.

A library of essential business documents is available online, including Employment Contracts, Advisor Agreements, founder Agreements, NDAs and IP assignments. “They have done a really good job on this, as these things can be overlooked by busy founders. I know numerous founders who have been really messed up in the legal process by not having the experience” notes Franklin. founders are guided through the platform as a digital journey.

It is promising to see traditional sectors like finance and legal services both undergoing digital revolutions simultaneously, cutting out fat, while finding innovative new ways to improve the customer experience. Both Payaca and SeedLegals are using new technology to remove barriers, and automate admin, while streamlining the transaction process. At scale, the efficiencies of these new digital business models are enormous. This is very good news indeed for customers, whether raising money to build a business, or raising money to build a bigger house.