Investments

Launching Econest—purpose-led property developer

Investments

Launching Econest—purpose-led property developer

Words Founders Factory

April 20th 2023 / 3 min read

We’re excited to announce the spinout of the latest business from our Nesta Mission Studio—Econest.

The problem

There are currently 26 million leaky properties in the UK, of which ~3.2 million are owned by private landlords. Under new laws, these landlords must ensure their properties are compliant by 2025 (EPC C or higher). As it stands, around two-thirds of private rental sector properties are EPC D or lower. 

But renovating and retrofitting your property isn’t simple—it’s costly, time consuming, and complex. The average retrofit costs between £12,000 and £26,000—often up to 11% of the property’s value. As a result, over half of private landlords are looking to sell their properties.

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The solution

Econest is a purpose-led property developer and landlord, with the stated aim of driving household decarbonisation. They buy properties of EPC D standard or less, and renovate these properties to EPC C or higher, using smart energy tech. They will then let these properties out to private sector tenants with bills included, managing the energy on their behalf.

Founder Marcel Shanti says: “Improving energy efficiencies of existing, ‘unloved’ and neglected houses is more important than ever, with the UK having one of the oldest and most energy inefficient housing stock in Europe. I am so excited that Econest has been accepted to spin out and join the accelerator programme, with a mission to decarbonise 10,000s of existing ‘inefficient’ properties. Having valuable partners in Nesta and Founders Factory, gives us confidence that we will be able to achieve our goal.”

The team

Marcel Shanti (co-founder & CEO)

Marcel has deep experience in the real estate investment and asset management world. He previously managed a £50m+ HMO national portfolio. As part of this, he raised £250m of debt/equity in the UK living sectors.

Ryan Snyder (co-founder & CPTO)

Ryan is a seasoned product leader with 15+ years leading product strategy in B2B and B2B2BC SaaS companies. He was CPO at climate tech startup Expect and at CartHook, a Shopify startup.

Why we’re excited to invest

Lizzie Hindocha, sector director for Mission Studio, says: “The solution that Econest has built goes a long way to decarbonise housing stock at scale and in a way that unlocks this asset class for institutional investors. They’re also helping tenants unlock more rental supply by rescuing stranded assets from private landlords who have exited the market, transforming them into tech-enabled retrofitted green properties. I’ve loved seeing the founders' passion, and with their backgrounds in property investment, development, and proptech, their founder-market fit couldn't be better.”

What Econest wants to get out of the programme

  • Further develop our MVP - to be even greater at sourcing, underwriting, and acquiring low EPC grade properties with high yields

  • Acquire, retrofit and refurbish those properties at scale - with those properties increasing in EPC/energy efficient grades (EPC grade B/C minimum)

  • Become known as the green company to rent from, with thousands of properties under management

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