Sherlok raises $3.4 million in funding

The startup uses artificial intelligence to assess home loans and identify better interest rates

Sherlok raises $3.4 million in funding

Adelaide-based startup Sherlok has secured $3.4 million in funding, led by venture capital firm Rampersand, as it prepares to launch its innovative one-click mortgage refinancing solution.

Founded in 2019, Sherlok utilises artificial intelligence to assess home loans and identify better interest rates for borrowers, according to a report by The Australian. The funding injection will support the company's expansion plans and the introduction of its instant refinancing platform in the second half of this year.

“We’ve been doing some sort of really early testing with brokers and homeowners and we’re now planning to go live in the second half of this year,” Sherlok founder and chief executive Adam Grocke (pictured above) told The Australian.

Initially targeting brokers with its software-as-a-service solution, Sherlok helped mortgage owners optimise their loans with existing lenders by identifying instances of inflated loyalty fees. Building on this initial offering, the startup extended its services to include refinancing with other lenders, according to The Australian. With the upcoming one-click solution, Sherlok aims to streamline the refinancing process, providing data-driven insights and facilitating instant transfers to new lenders.

By leveraging an artificial intelligence engine, Sherlok analyses mortgage rates, predicts borrowers' eligibility for refinancing, and determines the optimal timing for engagement. The startup expects over 60% of its brokers to adopt the new product, with each broker refinancing between one to two loans per month. Currently, there is no direct way for customers to find brokers using Sherlok's platform, as the service is primarily designed to support brokers in retaining existing clients.

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Investment principal Taryn Pieterse told The Australian that Rampersand felt Grocke’s previous experience as a broker gave Sherlok and edge.

“This technology is built for brokers, by brokers, with a deep understanding of retention strategy, and the single-click refinancing solution represents a major step forward,” she said. “Property ownership is central to the Australian economy and culture, and in a rising interest rate environment Sherlok has built the platform that swings things back in the homeowner’s favour.”

To utilise Sherlok's service, a broker's client must provide consent for open banking. Over the past year, Sherlok has experienced a 700% increase in usage, formed partnerships with broker associations, and established a collaboration with Australian Finance Group, a mortgage aggregator serving 3,700 brokers nationwide.

The startup has already attracted more than 500 brokers who have used the service to obtain home loan price estimates, The Australian reported. With upcoming partnerships and increased volume, Sherlok anticipates a significant influx of borrowers seeking its refinancing platform.

Sherlok currently manages approximately $70 billion worth of home loans for brokers.

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