Mishcon de Reya has invested in Thirdfort, one of its MDR LAB 2018 legal tech start-ups, which works with lawyers to securely hold money during property transactions.
MDR LAB is Mishcon de Reya’s incubator programme for start-ups operating in the legal space. In May 2018, the firm ran the programme for the second consecutive year, welcoming five selected companies from concept to revenue generating stage into the business for a 10 week period, giving them the opportunity to work within their target market to pilot and improve their products and to gain a better understanding of how legal services are provided. All MDR LAB companies had access to Mishcon de Reya lawyers and other business experts from inside and outside the firm for advice, mentorship and education.
Founded in September 2017, Thirdfort is a hosted software platform to improve identity verification and money laundering compliance and facilitate the exchange of money in property transactions. Its product transforms the current highly inefficient and insecure methods – pervasive across the market – through which money flows when properties are purchased. The idea for the business came about when the founders’ friend was defrauded of £25k when buying a flat in a type of fraud which, according to the Land Registry, has increased 20-fold since 2015.
Over the past year, in addition to participating in MDR LAB, Thirdfort has been authorised by the FCA (under the Payment Services Regulations 2017 to provide payment services) and has formed a strategic partnership with the Land Registry, which has included £20,000 of grant funding via their Geovation Hub. Thirdfort is also working closely with leading UK mortgage lenders and estate agents to ensure that the entire end-to-end experience for a consumer, from initial interactions with an Estate Agent, through the legal and mortgage process, is digital by design.
Mishcon de Reya’s investment follows Thirdfort’s pre-seed funding round, announced in September, led by the founder of Zoopla, Alex Chesterman, and leading legal anti-fraud specialist, Lawyer Checker, in which it raised £400K. Thirdfort’s founders continue to work with Mishcon de Reya, with a pilot expected to be run before the end of the year.
Commenting on the investment, Mishcon de Reya’s Chief Technology Offer Nick West said: “We created MDR LAB so that we could work with, develop and learn from businesses like Thirdfort to identify the gaps and opportunities in the legal market and use technology to address them.
“Robust security to prevent fraud in property transactions is vitally important as the cyber threat continues to evolve. The bureaucratic process around property transactions is also ripe for improvement and simplification. Thirdfort tackles both of these issues with one product, carefully developed with the buy in of key parties in the industry.
“We look forward to continuing our work with Thirdfort – piloting its product on live property transactions. As our investment indicates, we believe it has the potential to revolutionise the conveyancing process and we are very excited to have helped shape this product at such an early stage.”
Olly Thornton-Berry, co-founder of Thirdfort said: “Property settlement now takes an average of 16 weeks in the UK. The current process is long, arduous and – worst of all – open to fraud. Having benefitted from the MDR LAB programme, we are thrilled to have investment from Mishcon de Reya to tackle this issue.
“Through the LAB, we had access to property lawyers on a daily basis who could explain where the most acute pain points are in the current process, receiving constant feedback on our product as we developed it. We progressed our business and left the LAB with a product we could show to other lawyers.”