In a significant development for the UK's financial technology sector, digital mortgage and savings platform Tembo has successfully raised approximately £16 million in a new funding round. The investment, which will be officially announced on Thursday, is spearheaded by Gresham House Ventures, a prominent venture capital firm.
Starling Bank's Largest Investor Participates
The funding round includes participation from The McPike Family Office, which holds the distinction of being the largest shareholder in Starling Bank, one of Britain's most successful neobanks. This backing from a major financial institution's primary investor underscores the growing confidence in Tembo's business model and market potential.
Additional Investment Support
Other notable investors joining this funding round include Aviva Investors, Goodwater Capital, Love Ventures, Ascension, and the British Business Bank. This diverse group of financial backers represents both traditional insurance giants and innovative venture capital firms, highlighting Tembo's broad appeal across different investment sectors.
Founding During the Pandemic
Tembo was established just over five years ago during the COVID-19 pandemic by co-founders Richard Dana, Eddie Ross, and Geoff Wright. The company was created with a clear mission: to improve access to home ownership, particularly for first-time buyers and individuals facing affordability challenges in the UK housing market.
Impressive Growth Trajectory
The company has reported remarkable growth in its savings division, which expanded tenfold last year alone. Tembo now manages approximately £3 billion in assets under administration, demonstrating substantial market traction and customer adoption.
Richard Dana, Tembo's co-founder and chief executive, emphasized the significance of this funding milestone: "This investment represents a major step forward for Tembo as we continue developing a platform that doesn't merely help people find and secure mortgages, but genuinely empowers them throughout their entire homeownership journey—from their initial savings to the moment they receive their keys."
Strategic Partnerships and Product Innovation
Tembo has established partnerships with more than 100 organizations, including major brands like Aviva and Saga. Through these collaborations, Tembo integrates mortgage guidance and affordability-enhancing solutions directly into partners' digital user experiences, making homeownership resources more accessible to consumers.
HomeSaver Product Launch
The company recently introduced HomeSaver, an innovative combined savings and mortgage product. This offering provides customers with a competitive savings rate of 5.24% when they utilize Tembo's digital mortgage advisory services for purchasing or refinancing their homes.
Market Ambitions and Industry Context
While Tembo has not disclosed its current valuation following this funding round, the company has set ambitious market share targets. Tembo aims to capture 20% of the UK's first-time buyer mortgage market within the next two years, a significant goal in a highly competitive financial services landscape.
Rohit Mathur, an investment partner at Gresham House Ventures, commented on the challenging housing market context: "Home ownership in the United Kingdom has become one of the most difficult financial milestones to achieve, despite the existence of a £1.6 trillion mortgage market. Home buyers, particularly those purchasing for the first time, face increasing pressure to save larger amounts more quickly while navigating an increasingly complex mortgage environment."
This substantial funding injection positions Tembo to expand its technological capabilities, enhance its product offerings, and potentially accelerate its market penetration. The investment comes at a time when affordability concerns continue to challenge prospective homeowners across the UK, making Tembo's mission of improving accessibility particularly relevant to current market conditions.
