Tom Blomfield who co-founded Monzo Bank in 2015, left the digital bank, citing “challenges” from the pandemic and now he is taking a position in Generation Home.
Blomfield has already participated in Generation Home’s Series A funding round last month as an angel investor, then he was appointed to the company’s board.
Prior to Generation Home, Blomfield also invested in payroll automation startup Pento’s $15.6m Series A along with Matt Robinson, Blomfield’s fellow GoCardless co-founder.
In May last year, Blomfield moved from the position of CEO, Monzo to the newly established position of president to focus on the long-term vision of the company. He has also stepped down from the board of Monzo during June last year.
Generation Home launched in 2020 with a completely different model for home buying. The company’s model allows relatives to become co-equity holders in the properties their children bought, and go along for the ride.
English Housing Survey 2020 found out the average U.K. renter spends 35% of their income on rent compared with 18% for homeowners paying a mortgage.
With Generation Home, parents are enabled to contribute with a deposit as an equity loan. Generation Home then takes responsibility for the repayment of funds to the parents upon a sale of the property or remortgage.
Speaking to TechCrunch about his move to join the board, Blomfield said: “I met Will last year and what really excites me was the product. I think it’s so relevant, and it hasn’t really been covered in the mainstream press much. The problem with first-time buyers, trying to get a mortgage, is that they almost invariably rely on help from their parents or sometimes their friends to help. I’ve had experience with this and a lot of people actually mean it as a loan and they intend to get that money back. But mortgage lenders make you sign a piece of paper saying this is an absolute gift.”
“So hundreds of thousands of parents around the country are basically committing a – well-intentioned – fraud to help their kids get on the property ladder. So what I loved about the Generation Home product is that they’ve got this new legal structure where parents can effectively lend that money towards the deposit, but it’s structured as a loan if they want it to be. They have the right to get their money back eventually without having to lie. So that’s one thing that really really attracted me to the company. It’s just so so relevant to everyone, and people are just kind of blind to this problem.”
On a question, if he thinks there’s a “Monzofication” of FinTech business models in FinTech, as suggested by the success of Monzo’s model, where the user is put front and centre?
“There’s certainly a lot in common between what we do at Monzo and what Generation Home is trying to do. Big mortgage lenders focus on the mortgage product and the customer is like an inconvenience. As a customer, you have to fit with whatever the mortgage provider will offer you and it’s totally inflexible. It’s very similar with Monzo – we tried to flip it around, and focus on what customers really want and care about every day.”
“Simple stuff like notifications when you spend money or alerts before you go into overdraft – those are now commonplace and they weren’t, five, six years ago. I think Generation Home is doing the same thing which is focusing on the stuff that customers really, really care about, and then providing that flexibility and more features to meet their needs, rather than just raming everyone into the straitjacket of what a mortgage is doing,” he said.