Deposit Power-backed start-up secures $3.75m in seed round

The round was led by Correlation Australia Holdings (CAH), which made a significant strategic investment. Existing shareholders, including family offices and high-net-worth individuals, also followed on. This current round brings the total funding raised to date by Downsizer to $6.1 million.

CAH is affiliated with Lombard Insurance Group (LIG) and focuses on building profitable insurance partnerships with growing entrepreneurial businesses that can distribute insurance products.

LIG is a specialist provider of surety bonds and guarantees with operations in South Africa, the UK and Europe, and Australia. In Australia, the LIG family of companies includes Assetinsure and Downsizer’s strategic partner, Deposit Power.

Deposit Power is the underwriter of the Deposit Power Downsizer Bond, which allows Australians to use the equity in their home to back a deposit bond for a new purchase, rather than a cash deposit.

The Deposit Power Downsizer Bond is also available to investors, including self-managed superannuation funds (SMSFs).

Downsizer’s co-founder & managing director, Mark Macduffie, said the company’s mission is to help downsizers achieve their desired home transition, so they can stop worrying and start living.

“For example, we know that a big attraction for downsizers is reducing home maintenance and chores, upsizing luxury and convenience, and releasing equity to top up retirement income. At the same time, we know that a big barrier is funding a cash deposit,” he said.

“We’re thrilled to welcome Correlation and Lombard as investors and business partners. Culturally and commercially it’s a great fit.”

Deposit Power’s general manager, sales & distribution, Brent Davidson, said: “We’re excited to continue our synergistic partnership working with the Downsizer team.

“With Australia on the cusp of a home downsizing boom, we’re proud of our unique Deposit Power Downsizer Bond that enables empty-nesters to downsize by securing their new dream home before selling their current one. Together, we intend to ramp up the go-to-market strategy for the product by engaging with mortgage brokers, financial advisers, accountants and superannuation funds.”

In addition to cementing the established relationship with Deposit Power, the strategic investment by CAH involves the Downsizer team partnering closely with other LIG family companies, such as Assetinsure in Australia, which will onboard as clients onto Downsizer’s SaaS platform.

Correlation Australia Holdings’ director and Assetinsure’s executive general manager strategy & business development, Lance Warner, said the goup’s sweet spot for investment is early-stage technology and data businesses in the insurance space, with great entrepreneurs, who are building something new in the market.

“Downsizer ticks those boxes and we’re excited to support their Australian and global growth strategy,” he said.

[Related: Older Australians to 'downsize sooner': Bridgit CEO]