EYE Exclusive: Yopa announces new £16m funding and appoints Grenville Turner as chairman

Yopa has announced new investment of £16m and the appointment of ex-Countrywide CEO Grenville Turner as chairman.

The new money has been raised through Yopa’s existing investors, including Savills.

They are: dmg ventures, the venture capital arm of Daily Mail and General Trust (DMGT); Grosvenor Ventures which is the investment arm of Savills; and Yopa founder Alistair Barclay.

LSL, parent company of Your Move and Reeds Rains, is an existing investor but has not contributed to the latest funding round – and indeed LSL has down-valued its original investment.

Co-founders Andrew Barclay and Daniel Attia, former CEO and then chairman, also did not invest.

Yopa said that LSL has its own capital allocation decisions to make while Attia remained an “active, supportive and engaged shareholder”.

Ben Poytner, CEO of Yopa, said: “This latest funding round from existing backers is a clear recognition of Yopa’s significant growth potential.”

Manuel Lopo De Carvalho, CEO of dmg ventures, said: ”With DMGT’s extensive experience of the UK property market, we continue to see strong potential in Yopa and its technology and were happy to support this funding round.

“We are pleased that Grenville Turner has agreed to join the board to support the business as it continues to mature.”

 

Turner, who has been on the boards of Rightmove, Zoopla, US realtor Realogy and Sainsburys Bank, has given this exclusive interview to EYE:

INTERVIEW: New funding should push Yopa into profit

New Yopa chairman Grenville Turner is giving no time frame, but he is predicting profits for Yopa.

He said: “I am not going to say that this is the last fund-raising we will do but it should be enough to raise Yopa into profit.”

According to Yopa’s last published accounts at Companies House, covering the 12 months to the end of 2017, Yopa had cumulative losses of over £32m.

Asked if the investors were pouring money into a black hole, Turner was emphatic that this was not the case.

He said that “sophisticated” investors understand that “a lot of money is required for start-ups” as they build teams and brand awareness.

Turner also dismissed concerns about prospects for the online/hybrid estate agency sector, after both Housenetwork and eMoov went into administration, and with Purplebricks drawing in its horns after over-expansion abroad and the departure of its founders.

Turner said that in completely new sectors, investors also understand that the market consolidates.

He said that this happened in other new sectors, notably property portals – Turner has been on the boards of both Rightmove and Zoopla.

He said: “You are usually left with two or three players of scale, and my view is that in the hybrid agency sector, Yopa will be one of them.”

High street agents’ offices are now ‘billboards’

He does not think that the high street sector is doomed, but he does think it has changed: “High street offices are no longer places where people transact or even visit very much. They have become high street billboards.

“That is not a criticism – so long as the costs are appropriate. I do think that the high street will have a very long tail.

“However, I subscribe to the belief that people over-estimate the amount of change within two years, and under-estimate it over ten years.

“I think we are now in our third or fourth year of that change.”

What will Yopa do with its £16m? Or, put another way, what will it not do with it?

It will not expand overseas (“Absolutely not”) and it won’t go into lettings (“Our focus and our expertise is on sales. It is a completely different proposition from lettings).

Television advertising is not a priority. Instead, the money will be ploughed into technology, services – and people.

Staff headcount is currently about 170 – and they’re busy. The contact centres handle 4,000 to 5,000 calls a week, and more resources are needed there. There are currently 140 Local Property Experts and Turner envisages this rising to 200 to 250, depending on local markets.

Yopa will also be launching its own mortgage services “shortly”, although it plans to continue outsourcing conveyancing.

Yopa is a top ten UK agent

Turner has been quietly involved with Yopa for some months, in a consultancy role where he made some recommendations and then worked on its business plan.

He obviously won’t say much about that but does say that Yopa’s achievements so far have been considerable. “Yopa has become one of the UK’s top ten agents in three years. In terms of listings, we have been as high as eight.”

He believes that Yopa’s point of differential is that it offers both fixed fee (from £889 upfront) and a no sale, no fee service (£1,999), giving consumers choice.

No sale, no fee was launched only last year as a proposition but currently is behind 30% of Yopa’s completions: “My guess is that this will rise to somewhere between 33% and 50%.”

Connells bought Hatched but closed it. Turner’s former firm, Countrywide, went into online estate agency but it flopped and the proposition was withdrawn. Turner would not comment on any specifics but said: “A number of traditional agents have tried to launch into the hybrid sector, but there’s always a compromise.

“From my own experience with start-ups, you have to give them their own investment, teams, management, budgets and decision making. You cannot run them from within.”

The vastly experienced Turner will be as hands-on a chairman as the job requires: “More executive than non-executive – in private companies, the lines are more blurred than with plcs.”

Turner, currently a non-executive director with listed firm Watkin Jones, led Countrywide’s return to the stock market in 2013, with an IPO worth over £1bn.

Unsurprisingly, he does not exclude the possibility of Yopa floating on the stock market: “An exit is always in the minds of investors, so you cannot rule it out – particularly as there aren’t many exit options available.

“As a business, I do envisage it floating at some stage.”

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32 Comments

  1. smile please

    Not sure what Grenville will do. Other than being a figurehead to float his credentials do not suggest he is going to make much of a difference at yopa.

     

     

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    1. Bless You

      Can i get a dead horse and a flog for table 2 please.

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  2. Byers92

    Yopa has done well to bring Grenville on board. Our paths crossed briefly at Hamptons and I had a great deal of respect for him.

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  3. purplepatchy

    I genuinely wonder what it will take for investors to walk away from these disastrous ‘businesses’.

    Last I checked, businesses made money… seems like all it takes is someone to stand up in a room and say a variant of ‘You know those guys with 96% market share? Useless, people don’t even use them anymore! Invest in *insert generic online call centre ‘agent’ here* and I promise that it is perfectly conceivable that we *may* make a profit in the next 5-25 years!’

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  4. charlie.wright

    Yopa appoints executive from loss-making corporation to achieve profit in a new loss-making sector which has never shown a profit, selling a service which has no financial incentive to help customers complete a sale.

    An alternative headline could have read “investors who’ve already lost tens of millions they can afford to lose think nothing of investing a few more million they can afford to lose in the hope of becoming the sector’s number two to Purplebricks, by appointing someone who used to work for the country’s biggest failed agency brand.

     

    I cannot fathom the size of the blind spot investors seem to have when it comes to the property industry. They appear to ignore all typical VC decision making criteria and choose to ignore the mountain of evidence that this won’t make money, never mind that it will mean people paying for a service that they may not receive. Proof if it were needed that money really does not equal intelligence.

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    1. A Jobs

      CWD was profit making from 2011 to 2016, he stepped down at the end of 2015. Worth checking facts first

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      1. charlie.wright

        Precisely. It was making a profit when he arrived and stopped when he left. What does that tell you?

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        1. ARC

          That he joined a private company successfully floated it in 2013 and had almost doubled the share price from IPO before leaving his successor left when the share price was half that of the IPO. That’s what it tells me.

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    2. Mark Walker 2

      Wait until you hear about Uber…  It’s like the DotCom bubble bursting was a myth to these folks.

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  5. Ostrich17

    LSL throwing in the towel – they may as well write off their investment now.
     
    YOPA recently got rid of a number of people – do they really know where they are going?
     
    No doubt HS will be along shortly with news of more money raised to fuel expansion/pay for the new business model.
     
    At least this puts more pressure on PB, who have estimated closure costs in the US/OZ of approx. £15million to add to the UK cash burn. If YOPA  and HS start to steal market share from them, it could really rock their boat !  

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  6. AgencyInsider

    Funding. [Verb]

    To prop up a doomed loss-making business by tipping more and more money into a bottomless pit.

    (See also: Stupidity)

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  7. jeremy1960

    New funding of  £16,000,000 should push yopa into profit!

    Hey guys, bung me half that and I’ll guarantee you a profit and every shareholder gets a fluffy unicorn, dispatched from south America on the day we announce our figures!

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  8. Essjaydee51

    They aren’t listed and yet they have an MD and a CEO! There’s a saving to be had and let’s say they have 150 call centre staff with 5000 calls coming in a week, that’s 7 calls a day (max) each and he says they are busy!! And the business of no sale no fee will grow by between 3 and 50%! What qualifications do you need to make that kind of statement, one that when listed will be unacceptable to the city.

    Those billboard offices by the way are places where the clients get answers, service, efficiency and peace of mind.

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  9. haveathink

    Does anyone know the total funding Yopa has received to date?

    Before this £16m it must have been close to £60m? – massive marketing budget, big staff hire, been on TV every night, still made a £32m loss to year end 2017 – for me that says everything and this type of agency has no long term future in my view giving the expert and dedicated help that people need in the moving process.

    I just don’t get an original investor pumping more money in – when one, and you would expect getting similar expert financial advice,  has downgraded their £20m to £6.5m in less than 2 years, unless of course they are absolutely gearing up for this float? In such a float, and this is not my business so forgive naivety, will  investment inflows from individual investors ensure that the original investors get their money back?

     

     

     

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    1. dave_d

      They have raised total to date £91 million.

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    2. Property Pundit

      £91m raised so far.

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      1. WiltsAgent

        So these sophisticated investors have given another £16m to try and keep the show on the road. This isn’t a business for them, just an expensive hobby. Anyone got a rough idea how much has been tipped into these dud companies over the last 7 years?. Must be enough to make a profit by now. Neil Woodford used to be a sophisticated investor and as for Savills following his lead, well I’ll have whatever they’re smoking.

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  10. Philip Norgan

    We keep asking the same questions. What do they know that the rest of us don’t? Also how many “hybrids” have to go to the wall before investors realise that the customer wants a service, not a product?

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    1. AgentV

      I still don’t understand why Savills keep pumping money into this when they don’t have to. If they really wanted to invest in ‘new tech’ or ‘start-ups’ the answer has been in front of their noses for a long time.

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  11. PeeBee

    “The contact centres handle 4,000 to 5,000 calls a week…”

    According to Zoopla, they have 5142 properties on their books.  That’s less that 1 call, per property, per week.

    Oh.

    Dear.

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    1. Ostrich17

      How many of those calls were from vendors ? 🙂 😉

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  12. RichardHill61

    I bet £16m keeps them in the red unless they put it on black and spin the real which might be a more viable investment opportunity!!

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  13. MH -RM

    Maybe Savills know something we don’t?? … seriously want to go into hibernation until this is over … surely it’s got to be soon … all a bit like the paper straw this online revolution  … a great idea, good at the start, worrying in the middle … and then useless at the end … viva la revolution.

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  14. Malcolm Egerton

    YOPA score 9.4 (out of 10) on Trustpilot but 1.8 (out of 5) on Reviews.io and 3.9 on Google – can someone explain that?

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    1. ArthurHouse02

      Yes but the people who moderate this page will probably delete it.

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      1. Malcolm Egerton

        I’m gripped! Give it a go.

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  15. propertyguru11

    Already saw Russell Quirk “wishing them the best” – a piece of him dies every time some other company manages to raise money

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    1. nick1927

      Lol really tickled me that!

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  16. chris

    Grenville clear has an excellent head for business so by track record one can only think he will be able to bring Yopa success and profitability. That said, as they say in financial services past performance is not a reliable indicator of future performance.

    That said,  Past performance improves our ability to predict, not our ability to perform. To call past performance an “indicator” suggests that the more one succeeds, the more one will continue to succeed in the future.

    If Yopa is going to give someone a crack at where they want to be I would suggest Grenville is as competent as any so in this case and on the face of it I think they have done an excellent job in recruitment.

    One of the more interesting ones to watch

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  17. Gladimoutofit

    This is the same Man that gave his blessing to a certain Ms Platt when she took over his reins.

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  18. GPL

     

    YOPA – YOPALYPSE NOW?

     

    It’s like watching APOCALYPSE NOW….

     

    The thundering helicopters, thundering music, sacks of flaming millions being randomly fired from above….

     

    Think Yopa – Think Martin Sheen’s camouflaged head half emerging from the swamp…..

     

    At what point does this monumental YOPALYPSE NOW farce end?

     

     

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  19. rsvstu97

    The long slow death continues. So some investors, for whom a few million is chicken feed, think in for a penny in for a pound whilst others chose not to waste anymore money.

    Let’s get GT to act as figurehead to enhance our standing with the city.

    I give it less than a year.

    As for billboards, well at least my micro business makes a profit.

     

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