Online agent easyProperty is seeking a further £5m from investors.
According to Sky News, easyProperty’s fundraising discussions are “at an advanced stage”.
It would use the money to fund expansion and marketing.
Sky News city editor Mark Kleinman writes: “News of easyProperty’s latest attempt to tap investors comes just days before Purplebricks, a rival online player, unveils plans to list on the London Stock Exchange.”
He reports that easyProperty expects to make an announcement in the next couple of weeks, that there has been “strong interest from major players”, and that the share sale was over-subscribed.
A spokesperson for easyProperty said: “We can confirm easyProperty’s CEO Rob Ellice has been undertaking a planned third round of investment talks in line with commercial plans to fund the continued expansion of the growing online estate agency business.”
easyProperty, which has a licensing agreement with Sir Stelios Haji-Iaonnou, was founded by Robert Ellice.
It is not known how much the licensing agreement to use the ‘easy’ brand costs the firm, but the deal allows the online agent to use the brand in the UK and also allows for expansion into Europe.
easyProperty is also launching into online auction sales in the new year.
The sales will be run eBay style and utilise a new partnership with “instant” buying platform Clicktopurchase, which enables the exchange of contracts online.
So far, Clicktopurchase has been used for commercial property transactions in Britain. It was launched by Neil Singer of London-based commercial property agents Singer Vielle.
Ellice said the ability to exchange contracts online would be a “game changer”.
He said: “We will run a timed auction stating, ‘This property is up for sale’ and, as on eBay, you will be able to watch it, see what happens and when the time runs out you see where it goes.
“At the end of the auction, we will knock down the hammer and someone will have bought it.”
easyProperty launched in September last year with an online lettings service. It added sales this summer and at the weekend was listing 165 available properties for sale and 208 available rental properties.
Just before its launch last year, easyProperty had a round of crowdfunding to raise £1m – in fact it raised £1.42m – and said it was looking to raise a further £6.5m from other investors.
That was its second round of fund raising. Its first raised £5.6m.
He’s got to do something, he’s running out of money fast.
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Easy come, easy go!
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This is the proverbial definition of throwing good money after bad.
Wrong brand, wrong marketing strategy, wrong business model, wrong leadership.
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Online – eBay style auction eh?
Just like ebay if you forget to watch something or its end time doesn’t suit you, the property goes for cheaper than expected. Sometimes much, much cheaper. Im not sure any sane vendor will be wanting to dispose of their assets on a game of chance. Another headline grabbing but ludicrous idea. Meanwhile, they want another £5m of other peoples money. Mental!!
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The Easy band worked great for airlines but no other off shoot really got any traction. ironically I really like EasyProperty could be one of the stronger ‘easy’ brands and property portals but the market isn’t on its side.
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These game changing online disruptors don’t half borrow a lot of other peoples money
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I’ve been reading old EP press releases.. like the one stating he had 12,000 pre-listed properties..(no he didn’t)… like the one saying he would be letting 4000 properties a month by the end of last year..(nowhere near).. the one about the Spurs sponsorship and of course the move into Europe.. that also haven’t happened..!
And whichever way EP dress up their sales figures, its not a pretty picture at EPHQ. They need cash simply to keep going – as operating capital – there won’t be much left to invest on expansion…
EasyProperty need to decide what they are.. a lettings/sales/auction site – and then concentrate on doing it well rather than dabbling.. they talk the talk.. and Ellice doesn’t miss a chance to be an industry spokesman but what they really need are some regular and meaningful sales figures..!
And don’t forget, Ellice was talking originally about a pre-IPO and subsequent flotation and that was supposed to be happening about now.. and instead we have a watered down fundraising exercise to claw in a few million to spend on operating costs..
So why not the IPO?
Because a company seeking to float needs the support of a bank/financial house to create the flotation prospectus.. and the company comes under close financial scrutiny… and frankly, EPs dismal sales figures WILL NOT BEAR CLOSE SCRUTINY.
So, another of Ellice’s promises have blown with the wind.. and a simpler fundraising round like before will negate the need to fully disclose the company’s actual financial position, leaving unsuspecting punters with promises of gold but give them buckets of ****.
Ellice’s best mate and co-director in several ‘enterprises’ together is Kingsley Wilson of Crystal Capital.. who better to disguise a struggling business and put together an attractive proposal for unsuspecting punters.
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In fairness, crowd funding is very different and I understand why people want to invest. It’s rather like betting on the Grand National – where else would have the chance of huge returns for a modest wager. Easy Property only needs a small gain in national market share for investors to see a return. That said, if the proposition was put to a bank, then the P&L and gearing would make such investment very unattractive. As with all these new online ventures, the real litmus test will be profit. With 165 sales properties & 208 lettings properties, this will be a big ask.
I have no doubt online agents will generate a bigger market share in immediate future, but is this due to their success or the fact there are simply more of them? I have always believed the key flaw is that the potential saving is relatively tiny when one looks at net sale prices and further, buyers really don’t care. It’s a tough time for the online proposition too. With such high demand, traditional agents will have phoned out a property before a valuation and will have lined up applicants before the property even sees a portal.
There is undoubtedly a huge appetite for investment in online agencies, but sooner or later, someone will want to see a return. Small crowdfunders are one thing, but any company which floats will need to satisfy much more demanding and less forgiving shareholders. I wish them well as consumer choice can only be a good thing.
That said, only a few years ago, out of town superstores were spelling the death of the high street. Now, these retailers are moving back as demand is for convenience. The internet was created for all businesses at the same time and one must ask why estate agency is so far behind retail.
Nevertheless, online has made traditional agents buck up their online ideas and for that I for one appreciate.
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Hi Eric,
Sorry to keep chirping up on your comments but i you are a rather impassonate poster that i may not agree with but can get a balanced response.
You mention online has made traditional agents buck up their online ideas, In what way? i personally do not see agents changing their online presence over the last couple of years? I think we all adapt to new tech but i do not think this is because of the raise of the online agent.
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I think it focuses the mind. I know of many agents investing in new websites and part of the process involves looking at what the online agents are offering and looking at how we can improve our online experience from simply providing a list of properties. Additionally, we need to look at how we present on mobiles & tablets and migrate towards a hybrid model. Online agents only inhabit cyber space and some have innovative ideas – unsurprising when you consider how much they invest in their USP. Traditional agents would be amiss not to consider these innovations. The big challenge for online agents is to dominate their own market place in terms of SEO and I am yet to see any town where the top ranked agent is an online one.
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easy property ?
Easy cash more like !!!!
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One on-line agent in my area last year had a 0.13% market share to the same date. This year to date, they have increased that to a terrifying 0.39% market share. If you want to put a brilliant spin on this you can say that they have trebled their market share but how many millions has it taken to achieve that? No wonder these companies keep needing to raid investors piggy banks to pay the bills.
All on-line agents in total in my area have a 1.04%* market share, up from 0.58% in the same period last year in an area covering circa 200 Sq Miles – (Post code areas TR3, 11,12,13,14,17,18,19,20,26 &27 inclusive)
A force to be reckoned with? A national market share of 5-6%? Really? Even if on-line agents continue to grow at the same rate for another three years (which seems unlikely) their market share will still be below what they claim it is now.
There is not one statistical claim that I have seen any of these firms make that bears any weight or basic scrutiny.
By all means compete with established business models and, by all means offer innovative ways of customers service but, do so with integrity, honesty, professionalism and within the law.
Interestingly, as an aside, as the graph from this link (below) shows, consumers have, on average, a 64% chance of selling with a high street agent. But, if they choose an on-line agent, they are statistically more likely not to sell (a 45% chance at best). So much for so many claims about achieving the same or better results than high street agents and the death of high street agents.
https://twitter.com/PDQProperty/status/671223048062803968/photo/1
*This needs to be seen in the context of two new entrants to the market in this time
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