Mortgage Chat [AQSE:MCAI], the London-based technology company has had a year of change. Established in 2018 as a special purpose acquisition company (SPAC) that was seeking to identify investment opportunities in the medical cannabis sector, when the sector didn’t kick off as management expected it pivoted into a broader technology offering.
A year ago, (3Q23) management expanded its investment policy to include technology, fintech and artificial intelligence (AI). Company director Jeremy Woodgate said: “This shift allows us to tap into the robust growth and innovation present in these dynamic fields.” After zeroing-in on a fintech opportunity in the mortgage broking industry, management changed the name from Pharma C Investments to Mortgage Chat at the start of the year.
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Today the company provides mortgage brokers with a platform to streamline their operations and improve customer service. The technology platform that Mortgage Chat has developed uses AI to automate administrative tasks in the mortgage brokerage industry, such as gathering information from borrowers and processing applications. This allows brokers to focus on providing personalised advice and support to their clients.
AI to help make brokers more efficient
The platform uses its AI to automate brokers’ manual work and increase their in-office efficiency, streamlining application management and, through the AI, keeping the broker up-to-date with the latest technology. The platform also trawls the market for all possible mortgage deals – again saving the brokers time – and gives the brokers a wide range of lenders for their clients. In essence, Mortgage Chat is aiming to revolutionise the mortgage industry by leveraging technology to make the process more efficient and customer friendly.
After the name change in January, in February Mortgage Chat issued 210 million new shares, raising GBP105,000. This was used for working capital and financing the company’s strategic redirection. In March, Mortgage Chat entered into a software development agreement with Accru Finance to design and develop a web-based application capable of answering specific mortgage-related queries. The agreement was for a GBP15,000 up-front fee and 200,000 warrants at 0.5p/share exercisable within five-years.
The company also beefed up its boardroom, appointing Peter Wall as chairman, and Philipp Kallerhoff and Sarah Gow as non-executive directors. The new changes, said Woodgate, were: “[…] implemented to bring in fresh perspectives and expertise that align with our new focus areas in technology, fintech, and AI.”
Present funding will carry Mortgage Chat through to June 2025
The company’s realignment has been costly, with losses before taxation to end-December 2023 of GBP493,350, up 97.4% year-on-year. Although losses are up, management has taken account of the current cost and operational structure of the company and can meet its working capital requirements after preparing cashflow forecasts through to June 2025 from its cash and cash equivalents.
Management notes that Mortgage Chat is pre-revenue and has financed its operations through the issue of equity and is confident that it will meet its overheads costs for at least 12 months, but warned that the company’s ability to meet future operational objectives through to completing an acquisition will be reliant on raising further finance.
The company’s shares opened the week (2nd September) at 0.0095p, down 93.2% year-on-year. Over the year-to-date Mortgage Chat’s shares are down 82.7%. The company has a market cap of GBP314,000.
Mortgage Chat’s journey from a SPAC seeking medical cannabis investments to a mortgage tech company has been marked by significant changes and challenges. While the company’s AI-powered platform offers potential benefits for mortgage brokers, the financial losses and share price decline raise questions about its long-term viability. However, as the mortgage industry continues to evolve and technology takes a more central role Mortgage Chat’s ability to navigate these challenges and capitalise on its technology will determine its future success.
