Big lenders invest £10m in blockchain property network

Salmons: The more, the merrier

The three biggest mortgage lenders in the UK – Lloyds, Nationwide and NatWest – and property website Rightmove, have invested £10m in the digital property transaction business Coadjute.

Dan Salmons, chief executive of Coadjute, said the investment was based on a recognition by the three lenders, which account for more than half the market, that they needed “data sharing and an open property market and no one player could provide it”.

Coadjute brings conveyancers, lenders, estate agents, buyers and sellers into a network where they can securely share data in common formats.

It sits beneath each company’s software and Mr Salmons has previously compared it to a National Grid for property.

He said the £10m was the biggest single investment in Coadjute, bringing the total amount raised since it was launched in 2018 to £23m. It is also the first by mortgage lenders.

Mr Salmons said the investment came at a time of “huge moves” in the property market, not least by the government, in pushing for “something to happen” which made property data more open and accessible.

He said “a number of the top 10 conveyancers and estate agents” were already using Coadjute. However, there was “still some way to go” and the new investment would “help us roll it out nationally”.

Mortgage brokers were already using the system and having mortgage lenders “completed the picture”.

Mr Salmons went on: “We want to bring in as many players as possible. It’s an open network. The more, the merrier.

“We’re interested in providing the underlying infrastructure that sits behind the parties. This is the key difference between us and what has gone before.

“You can trace a parcel, why can’t you trace a property transaction? No transaction is less digital than buying or selling a home.”

Mr Salmons described the pandemic as both a “help and a hindrance” for the property market. “It did shake up the market and encourage people to move to new digital capabilities.

“However, there were a lot of challenges for estate agents and conveyancers in a ‘boom and bust’ cycle that was hard work for both.

“It was a difficult time for the property market, but the beginning of a recognition that it had to digitalise.”

Mr Salmons did not provide figures for the number of law firms using Coadjute or the amount of transactions completed, but said they were “increasing rapidly”.

This time last year, the network was involved in a successful project with the Bank of England, Project Meridian, to build a digital settlement prototype that sped up payments in conveyancing by linking banks, conveyancers and HM Land Registry.

Given his background in banking, where he helped lead the roll-out of contactless bank cards, he felt that property data was “in the same place” as the banking sector was then.

Contactless cards took off “very quickly” and in the same way, he believed, open property data was “really going to take off”.

Henry Jordan, Nationwide’s director of home, said: “The homebuying process needs streamlining into a single, integrated journey for the benefit of consumers and industry participants alike. We’re investing in Coadjute because we believe its technology has the potential to achieve this and be a game changer for the property industry.”

In a separate development, contracts platform Luminance has raised $40m in its latest funding round, led by California-based venture capital firm March Capital and joined by National Grid Partners, the venture capital arm of the National Grid, and other existing investors, including City law firm Slaughter and May.

Founded in 2016 by mathematicians and engineers from Cambridge University, Luminance uses artificial intelligence to automate the “generation, negotiation and analysis” of contracts. The company later expanded into the USA and Singapore, and now has customers in 70 countries.

Chief executive Eleanor Lightbody said: “This latest round of funding will help us to bring our technology to new markets, strengthen our foothold in the US, where Luminance now generates over one third of its revenue, and solidify our position as the clear market leader in this space.”

Ian Cooper, managing director of National Grid Partners, added that the power and utilities sector dealt with “a vast amount of legal and contractual documentation” and Luminance showed “great promise in being able to relieve contract processing bottlenecks and enhance contract performance monitoring”.

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