The insurance group Direct Line says it is taking a 15 per cent equity stake in Canopy, an ‘alternative deposit’ company.
Canopy offers a RentPassport which provides proof of an individual’s rental and credit history and their ability to pay rent promptly. The firm claims this helps letting agents and landlords to pre-approve renters, saving time with the vetting process.
The renter’s rating in the passport - a so-called Trust Score - will give them access to insurance products based on their score.
“The current rental model asks renters to pay deposits of several weeks' rent, and we believe Canopy’s use of mobile technology provides an innovative solution. By re-engineering the rental market, Canopy are seeking to enable Generation Rent to gain access to better financial products while demonstrating how technology can be a positive disruptor” claims Adam Whiteley, director of household development at Direct Line Group.
Tahir Farooqui, CEO and founder of Canopy, says, “We are excited by this financial investment as it supports the expansion of our business, which aims to improve every aspect of renting for all parties concerned – renters, landlords and agents. The days of the security deposit are now numbered, and we can now empower renters to become buyers far more quickly because their rent can now count towards their credit history.”