There’s over £85B in rent collected by landlords each year in the UK. One of the biggest challenges that the 2.6M landlords face is managing finances for multiple properties. Hammock gives landlords a clear financial overview of their properties. Hammock was built by landlords for landlords, so its features address multiple pain points. Through Hammock, landlords can easily generate a profit and loss analysis at a property level, view which properties are occupied, keep track of rent, maintenance expenses, and more. Landlords can connect all relevant bank accounts via Open Banking. Hammock’s platform has alreay facilitated 7M+ rent collections, across 1.5K properties, and tracked more than 100M transactions.
London TechWatch caught up with CEO and Founder Manoj Varsani to learn more about Hammock and how it transforms landlords’ financial relationship with their properties.
Who were your investors and how much did you raise?
We raised £1M in a Seed round led by Fuel Ventures. Ascension Ventures and Founders Factory were part of the round, together with some angel investors.
Tell us about the product or service Hammock offers.
Hammock provides rent collection, bookkeeping, current account, and data analysis services for the property sector. Hammock brings FinTech and PropTech together, helping landlords and property managers save time and money in the management of their finances.
Hammock is designed by landlords for landlords. It unlocks the potential of digital current account services and open banking, bringing real-time insights and clarity to income and expense monitoring for private landlords and professionals in the property sector.
What inspired the start of Hammock?
I’m a landlord. Like many landlords, I used to monitor my property finances with a spreadsheet, browsing through bank statements to keep track of income and expenses for each property. I quickly realised that I was losing time and money by relying on old technology and on current account services that didn’t support the specific needs of property finances.
The main challenges that landlords face involve rent collection, bookkeeping, and keeping the pulse on the performance of their investment. Hammock helps landlords overcome these challenges by automating rent collection, making bookkeeping and reconciliation into real-time tasks, and making crucial information about financial performance always available on its dashboard.
How is Hammock different?
Traditional current accounts are designed to cater to the budgeting needs of the widest range of individuals. Landlords, on the other hand, deal with unusually large volumes of transactions to and from various stakeholders, often spread across different current accounts. They also need a lot of detailed information to reconcile transactions (which property does this payment refer to? Which tenancy? Is there a charge for a commission?).
Hammock brings all property finances in one place and uses technology to automate landlords’ tasks.
What market is Hammock targeting and how big is it?
We work with the property sector. Our clients include private landlords as well as landlords who manage their business through limited companies, build to rent companies, property managers, and letting agents. Accountants use Hammock to help their landlord clients keep their accounts in order and avoid the stress of filing taxes last minute.
There are 2.6M landlords and 22K letting agents in the UK. In 2018 the total amount of rent collected in the UK was £86.5B.
What’s your business model?
Monthly subscription, based on the number of properties managed. Most of our users pay £9.99/month.
How has COVID-19 impacted the business?
We launched in March, shortly before the lockdown was announced in the UK, so the timing was concerning.
In reality, on the client-side what we found was that with the challenges of the COVID-19 outbreak, landlords felt even more than usual the need to keep on top of their property finances and to monitor their investment in real-time.
Looking at Hammock internally, we have an extremely lean team, all composed of digital experts: we were quick to embrace remote working.
We are also very proud of a volunteer initiative we launched in March. Charities and organisations in the third sector were struggling to source protective equipment (PPE) to keep their staff safe whilst running key services for the community. I recruited the whole Hammock team and twenty other volunteers to set up SOS Supplies, a non-profit marketplace where we connected organisations in urgent need of PPE with suppliers who had stock available for fast delivery at fair prices. We have helped more than 250 organisations (from small, local charities, to large, national ones) source more than £5M worth of PPE during the peak of the outbreak in the UK.
Being as busy as we were between the launch of Hammock and the volunteer work on SOS Supplies really helped the team manage the stress caused by the peak of the COVID-19 crisis in the UK.
What was the funding process like?
I was looking for investors who would be partners and not just providers of capital. It was crucial for me that we would have a shared understanding of digital financial services and of the potential of being laser-focused on a specific vertical (the property sector).
All our institutional investors (Fuel Ventures, Ascension Ventures, Founders Factory) embraced my vision for Hammock enthusiastically, so we had positive engagements from the get-go.
Once we agreed on the value of Hammock’s idea, the rest of the process was all about proving our ability to deliver and providing evidence of our early results on the market.
What are the biggest challenges that you faced while raising capital?
We approached this round when Hammock was less than a year old, so we didn’t have a rich history of business performance and data to rely on to persuade investors.
Articulating the key elements of Hammock’s vision whilst linking them with robust market data was the main challenge.
Then, as they say, fundraising is a full-time job. Juggling a full schedule of meetings with investors and document analysis to raise capital, whilst being all hands-on deck at Hammock at the same time has been an exhilarating challenge.
What factors about your business led your investors to write the check?
I created Hammock because I believe in the value of offering vertical-specific financial services. Our investors share this belief, and this was the cornerstone of our mutual understanding.
Secondly, our investors were impressed with how fast we had been in developing the product and in creating a beta version that our users could test. In less than a year, Hammock had gone from being just an idea to having a fully functional MVP.
Our team is mostly composed of people I have worked with in the past, therefore our ability to work together was already established.
Our investors were impressed with how fast we had been in developing the product and in creating a beta version that our users could test. In less than a year, Hammock had gone from being just an idea to having a fully functional MVP.
Our team is mostly composed of people I have worked with in the past, therefore our ability to work together was already established.
We all have individual track records of delivering complex projects and products on very short timelines. Our history together with our current work on Hammock made a strong case in our favour.
I have direct experience in both tech (I have been a CTO for 8 years) and in the property sector (having worked with an asset-backed peer-to-peer lending company and an online estate agent), this gives me knowledge of the industry.
I also have experience in start-ups, which is invaluable to get a brand-new business off to a good start.
I’m a landlord and I personally experience the same challenges that our target customers face in managing their own portfolios.
What are the milestones you plan to achieve in the next six months?
The biggest milestone is very close: in September we’ll launch our current account!
We’ll also launch our mobile apps, for both iOS and Android in September.
We are working on a number of new and exciting features for the near future, but I will not reveal them just yet. I’ll let you know when we’re closer to releasing them.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
As we’re all still adapting our day-to-day to deal with the COVID-19 crisis, it is even more important than usual that we focus on what we can control and to reduce uncertainty wherever possible.
For start-ups that are not profitable yet and do not have clear visibility on their next round of funding, it’s even more important than usual to identify the one project/product/feature that is core to their proposition and to be as single-minded as possible in delivering it in the shortest period of time.
Where do you see the company going now over the near term?
We’re launching our current account and we’ll be focusing on making it the account of choice for the property sector in the UK.
What is your favorite restaurant in London?
Dishoom is a favourite of mine and of the Hammock team.
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