London proptech startup Nested has laid off 20% of its workforce citing ‘Brexit uncertainty’
Nested, the London-based “data-driven” estate agency that provides a cash advance to help you buy a new home before you’ve sold your old one, has laid off 20 percent of its workforce, TechCrunch has learned.
According to sources, the more than 15 staff being let go were informed earlier today. The majority of departures are within Nested’s operations team, including sales, although I understand they also include a number of engineers and other product people.
Contacted by TechCrunch, Nested co-founder Matt Robinson confirmed the departures, citing the uncertainty of Brexit, and the impact this is having on liquidity in the housing market. It is understood that the layoffs are designed to place Nested in a better financial position and enable it to continue weathering the Brexit storm, and ultimately position the company to reach profitability in the future.
Robinson provided the following statement:
We have come off a record year and quarter but with continued uncertainty around Brexit market volumes have fallen significantly. We will continue to grow share, however, given the external environment we must remain cautious as we build the business for the coming years.
Launched in late 2016, Nested competes with high-end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will loan you between 90 and 95 percent of the market value of your property as a cash advance so you can purchase a new home prior to your old one selling.
Before Brexit and the uncertainty it has caused with regards to U.K. house prices, that figure was “up to 97 percent” of the market value of the property.
More broadly, the idea behind Nested is to eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, and also ensure that you’re never caught up in the dreaded property “chain” and miss out on your desired home. By becoming a cash buyer, it also puts you in a stronger position to negotiate your onward purchase.
Related to this, it is unknown to what extent the downward pressure on house prices in the U.K. has affected Nested’s market fit, or its ability to use data to accurately value the properties it lends cash against. However, the core value-add of not being stuck in a chain would seem to be just as useful in a downturn as it is in an overheated market.
Meanwhile, the downsizing of Nested comes just four months after the startup raised a further £120 million in funding, a combination of £20 million equity financing and £100 million in debt. The equity part of the round was led by Northzone and Balderton Capital, while the source of that debt financing, to be used primarily for the cash advances Nested provides to sellers, was not disclosed.
Previous backers in Nested include Rocket Internet’s Global Founders Capital, and London-based Passion Capital. The current listed directors are CEO Robinson, Rocket Internet’s Oliver Samwer, COO James Turford and Northzone’s Jeppe Heinrich Zink.
Separately — and unrelated to today’s layoffs — TechCrunch has learned that Phil Cowans, who co-founded Nested alongside CEO Robinson and COO Turford, stepped down as CTO of Nested in the last few weeks, although he remains at the company in a different role and as co-founder. He also resigned as a director of Nested on the 25th of February, according to a regulatory filing with the U.K.’s Companies House.