London based start-up, Homeppl, has raised $2m (£1.5m) to continue its expansion in the UK rental market.

The tenant referencing platform assesses the UK’s 15 million tenants’ risk level, and is designed to allow letting agents to avoid fraud, default, or the delays that restrict lets from the 1 in 3 tenants blocked by current archaic processes.

The firm uses Open Banking, “proprietary behavioral analysis” and fraud detection tests to assess the financial situation of potential tenants. It said that COVID’s negative effect on personal finances could increase the risk of defaults and frauds.

Conversely it said its approach means that up to 5 million tenants who are currently rejected by the system would be able to pass checks.

These “invisible” consumers include the self-employed, international students and expats.

The focus of the latest fundraise will be to support its growth with more staff in R&D, operations, and sales.

Homeppl is backed by VCs including Ascension Ventures, Fair By Design, and JLR Star and is a Barclays Techstars company.

It was founded by Alexander Siedes who drew on his experience working in military intelligence in Israel to develop the platform. He experienced the market firsthand when moving to the UK for his BSc and MSc.

“The rental market has used old credit check methods to assess whether a tenant can afford to pay,” he said.

“We need to stop imposing an unfair ‘tenant tax’ on consumers and stop giving landlords false confidence – it’s time the market used a solution that’s fair for both sides and prioritises giving an accurate assessment.

“The pandemic is compounding this problem and has reinforced the need for a robust due diligence tool.”

Emma Steele, Investment Director at Ascension Ventures and Ascension Fair By Design Fund added: “We see Homeppl solving shortcomings faced by those from disadvantaged financial backgrounds, creating a frictionless international economy”