RentGuarantor (RGG) , a provider of rent guarantee services for private tenants including students, benefit claimants, and retirees, issued a follow-up to its November 2024 announcement regarding a fundraise of up to £500k via convertible loan notes.
RentGuarantor said it successfully raised £455k by issuing 10% coupon unsecured convertible loan notes. RentGuarantor CEO Paul Foy participated with a subscription worth £80k via his company Southpaw Limited.
The loan notes carry a coupon of 10% per year with interest paid annually. RGG will be able to convert the principal into ordinary shares at the lower of the share price on the day falling 10 business days after the service of a conversion notice and the average across 60 consecutive days prior to the conversion date. If not converted, the loan notes will be redeemable after 2 years.
The period for subscription has now closed. RGG said the funds will be used for working capital and capital expenditure requirements.
Paul Foy, CEO, commenting: "I am pleased with the success of the fundraising efforts and have personally invested, confident in the opportunities that lie ahead for RentGuarantor in 2025 and beyond."
View from Vox
RentGuarantor (£29m mktcap) has confirmed a successful fundraise of £455k via 10% convertible loan notes to boost its working capital for FY25. The company enjoyed strong growth in FY24 after winning several major contracts, setting the stage for continued expansion through FY25, now with a stronger balance sheet.
In FY24, RGG exceeded its previously set target for new users, letting agents, and landlord clients, growing to over 25,000 new signups per month. Simultaneously, RGG expanded its professional rent guarantor services to over 1,100 letting agents in the UK. The newly raised £455k will fuel RGG's growth in FY25, enabling the group to expand its headcount and meet surging demand for professional rent guarantor services in the UK.
Demand has been boosted by regulatory changes, with the upcoming Renters' Rights Bill set to introduce new legislative requirements for the rental market. The regulation is good news for RGG's professional services as it is likely to drive increased demand from both tenants and landlords seeking secure and compliant rental solutions.
Overall, RGG is well-positioned for continued growth in FY25. Favourable regulation and a solid pipeline of partnerships and continued business development, alongside the £455k boost to the balance sheet, sets the stage for continued growth in user numbers. RGG continues to expand its footprint and brand awareness through partnerships and product development, with its latest platform able to handle 1,000 applications per minute, supporting further growth in the B2B market.
FY25 performance will be supported by strong momentum from FY22-FY24. In its most recent full-year results, RGG reported significant YoY revenue growth, building on similarly impressive FY22 results. A 79% surge in revenues, with tenant contracts up 57%, reflected the aforementioned growth in demand. RGG maintains a positive cash position and is advancing toward profitability, with losses further narrowing to £815k in FY23.
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