Funding lines come three months after Blend closed an equity funding round to scale the business
Blend intends to significantly step up its funding to mid-sized housebuilders across the UK
London, 11 April 2022 – Market-leading and award-winning specialist development finance lender Blend Network (“Blend”) has SECURED £120 million committed capital from a consortium of large family offices to significantly boost its lending capability and further support mid-size property developers in the UK.
This strong show of support in the form of a committed capital to be deployed by Blend reflects the company’s rapid and consistent development since its establishment in 2018 and its strong track record. It is also a clear recognition among investors of an urgent need for liquidity among mid-sized housebuilders across the UK. The capital committed comes from six large family offices, illustrating how Blend has heavily invested in digitising its lending process for institutional investors and family offices, which now make up more than 90% of the company’s funding base.
Blend also has some notable business and finance figures as longstanding investors. These include Publicis Groupe Chairman Maurice Levy, OakNorth Bank Chairman and former Barclays Vice Chairman Cyrus Ardalan, former Glencore executive Nico Paraskevas, and Jean-Philippe Blochet, co-founder of Brevan Howard, one of the world’s largest macro hedge fund that at its peak managed $40bn.
The fresh funding will be deployed to further scale Blend’s loan book, following the company’s recent “Origination-as-a-Service” initiative, which includes full security, transparency, and an enhanced due diligence process carried out on all loans.
Global law firm Ashurst advised Blend on this transaction as well as on recent equity investment round.
Blend was founded in 2018 with the aim of helping to solve the UK housing crisis by bringing much-needed additional funding capacity to the property market. The process of lending has remained the same since the 1990s and SME and mid-sized property developers have found it difficult to find the right lender and secure finance from established banks. Blend’s vision is to help alleviate the national housing shortage by delivering greater liquidity to smaller housebuilders.
Blend has managed to double its lending volumes annually since 2019 and grown rapidly despite the impact of the pandemic. Blend’s strength and USP – being a solution-focused lender – has meant that even at the height of the pandemic it recorded 0 loss on its loans. Developer-focused solutions such as offering 6-months free extension on its loans has meant that Blend is able to support its borrowers at every stage of their process.
Blend’s sustained success reflects the market opportunity that investors have recognised. While the Government has pledged to build 300,000 new homes annually by the mid-2020s, the Home Builders Federation report last December has cast doubt on the viability of this target due to post-Covid financial strain. As a result, housebuilding projects need new sources of funding beyond traditional lenders. Blend’s market-leading platform modernises the property lending process and helps mid-sized housebuilders by providing services only previously available to large, established developers.
Yann Murciano, CEO of Blend Network, commented: “Obtaining a record £120 million committed funding line from such a respected group of family offices is a landmark moment for us and illustrates how much progress we have made as a business in a relatively short time and how our funding is now much more focused on institutional investors. This fresh funding line will allow us to not only boost our origination capability significantly but also widen the breadth of services that we offer property brokers to assist them in sourcing attractive lending opportunities. Overall, it allows us to offer greater support to help mid-sized residential property developers across the UK boost their lending capacity, which will in turn make a greater contribution to solving the country’s housing crisis.”
Jonathan Cohen, Partner at Ashurst, commented: ““We really enjoyed supporting the Blend team scale up and raise funds to put them in the position where they have successfully secured this committed capital, and we look forward to working alongside them in the next phase of Blend’s exciting growth.”