A rental fintech startup founded by former Apple and Monzo staff is shutting down just three years after launching.
Fronted, which has raised more than £20m, announced it was closing via a message on the company website from CEO Jamie Campbell that said: “After an incredible journey together, we’re saying farewell to Fronted. Thank you for being a part of our journey, your support made it all possible.”
The startup was founded with the goal of providing renters with affordable credit options to finance deposits.
In an interview with Tech.EU, Campbell said: “The real reason behind the issue is that in September of last year, our cost of capital went through the roof which really impacted our ability to offer the product at a price that consumers would pay for it.
“We knew that we had good results when customers were paying around about £50 for it, but the shift in the market meant we couldn’t offer it for less than £100, and the price elasticity for our customers just wasn’t there.”
Fronted raised £19m in debt funding from Fasanara Capital in 2021, according to Dealroom. Since then, interest rates have risen significantly.
The Fronted CEO told UKTN, however, that the interest rate for the debt investment was locked at the time it was granted and therefore not affected by the rise in interest rates.
Campbell said that rises in costs meant the company would never be “able to go to market with the product that we wanted at the price we wanted”.