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Bunk CEO and co-founder Tom Woollard is aiming to radically transform the experience of renting property, having had painful personal experiences of renting going wrong. “Renting property is the leading cause of stress and anxiety for millennials”, he explains. The vision is to offer a fair, easy, low-cost digital letting experience; a slick all-in-one platform that goes well beyond a listings portal. Woollard is somewhat obsessive about innovation in this market, seeking to create a new class of intermediary between landlords and tenants.
Top grievances with the trade include a lack of transparency or accountability and the absurd costs of handling basic administration. UK agents charge a remarkable £5.6 billion in fees each year, while boasting the lowest consumer satisfaction levels for any industry (by far). This is a market ripe for change. People moving house will be all too familiar with the pain and skulduggery of recovering your deposits. “While still a student, I was being ripped off for my flat’s entire deposit, which was almost £3,000. So this encouraged us to start researching, and every tenant we spoke with had had a nightmare journey with renting.” Woollard challenged the agent head-on about the deposit, and eventually, the deductions were reduced to £46 per person. “Because we felt this pain so personally, it has given us the drive to fix it for others too”.
The team is set on a paradigm shift. “For generation rent, accommodation is our biggest single cost. Why is there no user-experience, no transparency, no flexibility, no control, and accountability over the rental journey?!” Bunk has built a very impressive all-in-one platform to improve on this, helping you to find your perfect property, chat directly with the landlord, book viewings, make offers, sign your contract, pay your rent and report any maintenance issues.
Whilst the company was founded from the perspective of frustrated tenants, the discovery that problems were equally, if not more, pervasive for landlords encouraged the founders to pursue radical change in the market.
Bunk sees itself as a challenger brand, looking for ways to disrupt the market – with fairness and efficiency at the heart of it. Their pricing offer to landlords is potentially very disruptive, introducing a flat fee structure, as low as £10/month. The average UK fee is £1,600 (4 weeks rent), so this is extraordinarily competitive. For tenants too, rental payments will soon contribute to your credit history (through a partnership with Experian); the concept of having a rental passport is a game-changer if you plan to buy later. It is perhaps no surprise then that they have attracted the backing on Nationwide (lender of choice to many), as a recent institutional investor and strategic partner.
“There’s no handbook for this” notes Tom Woollard, who partnered with co-founders Harry Stirling and Jack Widnell from inception while at university. The lack of rules guiding them is seen as an advantage, helping the company to re-imagine the trade from the ground up. “We were very lucky to connect with a business mentor to sanity-check our business plans at the early stages”. The mentor became their lead investor. Looking back at their startup story, Woollard recalls 3 founder friends moonlighting while at university, having suffered the pains of renting themselves.
They found themselves pitching with a simple deck for pre-seed funding while doing their finals, attracting offers from an angel syndicate. Woollard describes this as something of an informal ‘friends and family’ style round of funding, originally using borrowed legal documents, to get £150k in to start the company.
They then discovered SeedLegals, which helps Founders through the journey of raising capital, using it to formalise a second seed funding round, with new Articles, while including corporate venture investors Nationwide on the cap table. “We are looking forward to getting into Series A funding next year and going back to SeedLegals for this”, noting that SeedLegals has recently raised VC capital from Index Ventures, administering it all through the platform.
“We did not go through the traditional route,” Woollard explains, having attracted a corporate investor early on. SeedLegals helped Bunk by automating the investment journey, while they worked through it with a corporate lawyer side-by-side. “It was a really interesting experience, going through the process on the platform with a traditional lawyer,” noting the irony of how much work SeedLegals is taking away from the legal profession.
“It is an incredibly founder-friendly platform that I now see as an essential resource for first-time founders. It is absolutely fantastic.”
The documents available to Founders at the early stages are seen as an invaluable resource too, including Founder Agreements to map out fair if-this-then-that scenarios, including vesting schedules. Bunk has done all of their IP agreements, employment contracts, NED and contactors agreements online through SeedLegals for a low-cost subscription; “all the things you need as a startup, that you don’t normally have access to, without paying a lawyer”. EMI options are in the pipeline too.
There’s irony in the nature of this intra-startup relationship; two enabling SAAS platforms coming together like this, while each seeking to transform their respective markets – directly challenging incumbent business models, and getting technology to do fundamental administration. Bunk has a very exciting opportunity to fix the broken rental market by taking a customer-centric position and enabling seamless transactions, including contractual sign-off. It is refreshing to see such a positive example of entrepreneurship and technology coming together to make life much better, while simultaneously cutting costs for customers. Hopefully, indeed, this step-change in technology offering and the changing nature of tenant-landlord relations leads to a paradigm shift in the property industry at scale.