Has anyone checked this out yet?
Meet Nude, the new way to save for & purchase your first home: https://nude.seedrs.com
Pre-registration is live now with over 1,000 people signed up to (hopefully) invest, we go public on July 6th.
Happy to answer any Q’s you may have!
Interesting little one, but I don’t see the profit in just skimming interest on savers money, even with a tiny team and presumably a tiny cloud footprint. Interest rates are dirt and will remain so. The hint at offering mortgages is a whole new ballgame and would increase costs considerably, in what is a very competitive market and very tough to get right.
The real money without upfront costs (and I doubt there’ll be much in the bank to pay for those purely skimming interest) is in referrals - you can quite easily use data to predict when someone will be ready to begin discussing mortgages (when they’ll have their deposit saved for the average house price in their area etc) which is a high quality lead for lenders - but to do so you’ll need to tell your users upfront that their data is being passed on to third party lenders, which goes against your “why we’re called nude” a bit.
Have signed up, will take a look at the campaign, but I don’t see this one ever becoming profitable. You’re competing against 25% free money in a LISA for the majority of the country (pretty much only excluding parts of London where the 450k cap is exceeded), your addressable market is first-time buyers only (everyone else gets deposit from selling their current house) and you really have to ask “is some motivational quotes and a predicted time-you’ll-be-ready” better than 25% free money?
(Disclaimer: Surface look at the company, no commercial dd whatsoever, just early thoughts on the model, path to profitability, “mission statement” etc)
How do they help? Surely by taking a cut of the interest they slow you down…
That’s what leapt out at me too. In fact I think targeting this product at first time buyers and causing them to miss out on that 25%* ‘bonus’ is quite shady and I wonder if it could be seen as misselling?
*Avoiding a rant about how the whole LISA bonus for first time buyers is a disgrace, another bribe for voters of a certain party that keeps houses prices artificially high/overinflated and how its funded on the backs of those who’ll never be able to afford a house and diverts their taxes to those who can afford to save in a LISA.
Surely it’s a bribe for voters of any party who want to buy a house?
It’s also an extremely simple way for self employed people who don’t have a company pension to save for their retirement.
IMO the LISA aligns perfectly with FT values and it’s one of the reasons I really hope they prioritise getting them on the platform sooner rather than later.
Hey mate, lots of good observations, thank you. As you say at the end of your comment, you didn’t have much to go on as I shared this when only the pre-registration page was up.
We’ve now launched the full campaign which should answer and clarify a number of your Q’s.
I’ve tried to highlight points to help:
Banks have traditionally earned a lot of money by ‘skimming’ a lot of interest at the expensive of customers i.e. interest you currently get is only a share of the overall interest. We want to have a more transparent and fair approach whereby we share some of the interest we earn and make it clear to customers. We’ll also not necessary be the best rate on the market at any one point in time, but we’ll not entice customers with a great initial rate and then lower it later and hope customers don’t switch.
At the current time we’re planning on taking c.0.5% p.a. and giving our customers the balance. As saving for a home means saving large amounts of money (the average deposit in the UK is c.£46k) we end up making a large amount of money. Every £10,000 saved = £50 p.a.
I agree that providing mortgages adds costs and risks, but the increased margin (revenue), even in today’s competitive environment, is substantial, it more than doubles the 0.5% p.a. in the previous point.
Over say a 6 year period of saving and then another period providing a mortgage, this all adds up.
Agree on the potential to add money via referrals. As yet, we’ve not allowed for any revenue to come from referrals, so the revenue forecasts in our deck are from interest margin alone and any income from this will increase our revenue. As you point out we’ll need to be very careful how we protect our customers’ data as it’s a key part of what we’re about.
Thanks for signing up and I hope you’ve had a look at our campaign and can see how we’ll become profitable. As you’ll notice, we’ll not be competing against LISAs – we’ll be providing LISAs, 25% is a fantastic bonus from the UK government. The initial addressable market is over 13m people that would like to own a home and we grow from this point helping in more ways i.e. first-time home ownership is only the start.
Happy to answer any further Q’s you may have! Crawford, our CEO, would no doubt be delighted to jump on a call to talk through too.
As mentioned in my recent response to @TestTalker, it’s worth noting that the interest you generally receive from savings accounts is only a share of the overall interest. The organisation you are saving with shares the interest revenue with you, which is what we intend to do, too.
Our goal is to help people and to do this we also need to be commercial, otherwise we couldn’t stay in business and help people for long. We also want to be fair and transparent, hence the approach we’ve taken to helping people. The amount you save generally has a much bigger impact than the rate of interest. For example, an extra 0.5% p.a. interest on £1,000 is £5 over a year (£50 based on £10,000 of savings).
Compare this with:
- A LISA bonus of £250 on £1,000 saved
- Cutting down on food delivery, say £50 p.m = £600 a year
- Even £2.50 reduction in spend on say coffee per week = £130 a year
The important thing then is that these all add up to years off your goal. Renting is more expensive than owning your own home and on average, every year saved saves £6,000 in rent costs. Get into your home 3 years quicker and you save £18,000.
We think our share of the interest is a fair price to pay for the benefit our customers receive from our offering.
Please do let me know if you have further thoughts or questions, I’m more than happy to help
Hey @CashCow, we’ve now launched on Seedrs and hopefully it’s now clear that don’t intend to compete with LISAs, they are a key offering of Nude. Thanks for pointing this out, we were maybe slightly too vague on our pre-registration page.
On your note, we’re trying to get LISAs to as many people as possibly and ideally to those who most need the help. It can be unfair at times as solutions like LISAs are generally taken up by the more affluent financially aware people at the expense of the rest of society. We want to help change this by making it easier, all you really need to do is download our app, choose where you’d like to live, the type of home and we’ll help you with all of the rest.
I have a few more questions.
The practice of throwing all your pre-committed investors at Seedrs to pump up the ‘already funded %’ is a practice that really bothers me. You’re 96% funded, giving retail users the impression this is a high-demand investment opportunity - but the reality is that the vast majority of that is down to about 15-20 people, all of which are anonymous or have only invested in Nude. In fact, going all the way down to the £3000 mark, everyone above fits one of those two descriptions: anonymous, or Nude-only investor, and then some after that point too.
This is dishonest. You’re convincing retail users of Seedrs that you’re in high demand on the platform when the reality is that you’ve just lined up your investors and told them to do it via seedrs to look better.
Then, “the average deposit in the UK is c.£46k”, this includes London and surrounding areas. Outside of London this value drops considerably, which raises an issue for Nude: LISAs are extremely limited in and around London due to the 450k cap, so the people who’d have the most money on your platform were they to use it won’t use it as much due to that cap. How do you reconcile the fact that the biggest income-generators for your business will be less likely to use it?
I was initially interested in investing in this company, but I’m struggling to see any real innovation - there’s nothing wrong with it, but the concept to me boils down to savings encouragement & trickle savings concepts - several apps out there for this already, & accounts with reduced fees compared to the banks, along with mortgages - essentially a building society with a modern app then… Like I said, nothing wrong and I wish them luck, but I personally am struggling to identify the standout concept or USP that will make them stand out of the crowd to potential customers. I dont think the name helps either “Nude” doesn’t scream banking or saving does it?
Essentially you’re paying 0.5% a year to be told to save more and also have your accounts aggregated.
The name is really bad IMO, what do they want to convey with the word “nude”.
Also failing to find a USP.
I am also struggling to see anything standout. Some things feel already covered in other apps. NatWest I know has a spending tracker where my friend said once they saw £250 under the Health and Beauty category it made them feel so guilty for spending so much on makeup they fixed up in the next month.
I do have friends who are half-heartedly saving for a house but find it hard to cut back on takeaways, sports stuff, makeup, clothes, tech, nights out etc. so an app that would help them do that might have a gimmicky appeal to them but it’s hard to say.
The LISA would need to be a must have though.
All that is what challenger banks like Monzo excel in. So Nude is imho unnecessary.
Monzo is called Monzo after they got told off for being called Mondo. If I remember correctly, they got their community to choose the new name.
Google is called Google because it’s based on googol, a large number that is 1 followed by one hundred zeroes.
Nude is called Nude because (???) their product is like the emperor that has no clothes?
I have to agree about the name — not only does it tell me nothing about what they do, it’s also an SEO challenge I wouldn’t wish on anybody.
I spy a name change in the not so distant future.
Safe search on!