Bofink was launched in 2017 to provide mortgage health checks through an app. However, the Swedish startup has now been forced to reconsider its business idea.
Originally, Bofink’s founder planned to make money by becoming the man-in-the-middle between private individuals looking for mortgages and the providers. The only problem was that it was impossible to cash in on the proposition, especially since the big banks were been unwilling to sign up to the intermediation service.
“Digital intermediation services for mortgages just don’t fly yet,” Joachim Ronneback Thomson, CEO and founder of Bofink, told Breakit. “Today, there are no market conditions for it and you can’t make any money.”
Another problem for the fledgling FinTech firm was that the thousands of people who were using the app to find better mortgage terms with competitors to their current banks then went back to the original bank to argue for better terms.
This resulted in the big banks being able to match the terms, which essentially meant that there was no need for Bofink’s services.
Even though Ronneback Thomson still believes there will be a need for the intermediation service in the future, Bofink is now pivoting to offer its own mortgage service.
Having shut down the app for now, the company has been given a licence from Finansinspektionen, the Swedish Financial Supervisory Authority, to conduct this kind of service in December 2019.
The pivot comes after the startup attracted SEK11m (£890,000) in venture capital. Last year it reported a loss of SEK5m (£400,000).
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