UK Neobank Perenna Secures $52 Million Funding Ahead of Mortgage Launch

Perenna, the innovative neobank that entered the financial scene in 2020 with a mission to disrupt the UK’s mortgage market, has successfully raised a substantial $52 million in its latest funding round. The investment, comprising entirely of equity capital, was spearheaded by Silverstripe, a backer with a notable presence in the industry, having previously supported rival Zopa. Additionally, an existing strategic investor in Perenna, who also led the company’s last funding round with $30 million in September 2022, continued their support.

This funding round elevates Perenna’s total capital to an impressive $90 million. The achievement comes on the heels of Perenna’s recent acquisition of a UK banking license from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), marking a significant milestone in the neobank’s journey.

Arjan Verbeek, the CEO and co-founder of Perenna, expressed his optimism, stating, “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.”

Verbeek went on to highlight Perenna’s mission, saying, “With over £3 trillion of investor capital currently lacking efficient access to the UK mortgage market, our covered bond platform will unlock this, enabling them to generate sustainable risk-adjusted returns while also delivering better outcomes for homeowners across the country.”

Following this funding injection, Perenna is gearing up to launch its long-term fixed-rate mortgage products, funded through a pioneering covered bond model, a first of its kind in the UK. This innovative funding approach ensures Perenna won’t rely on retail deposits to finance lending but will instead raise capital by selling securities to pension funds and other financial institutions.

The anticipation is high, with a waitlist of 5,000 eager individuals who will be invited to apply in the coming weeks, followed by a wider public rollout later this year.

Hamish Peacocke, the Chief Commercial Officer and co-founder of Perenna, highlighted the urgency of reforming the UK mortgage market, saying, “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.”

Peacocke believes that Perenna’s innovative covered bond funding model could pave the way for similar reforms in international markets. “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,” he added.

Perenna’s groundbreaking approach promises to bring positive changes to the UK mortgage landscape, offering more choices and flexibility to homeowners while attracting investment from a previously untapped market of eager investors.