The former head of Purplebricks in America has announced a fund-raise for his new online estate agency business, Dwellowner.
Eric Eckardt told EYE last night that he might launch his business in the UK – where it could compete with Purplebricks itself.
The business model of New York based start-up Dwellowner is similar to Purplebricks, which has withdrawn from the US. However, Eckardt said last night there will be key differences.
He said that Purplebricks’ marketing spend in the US had been enormous. Dwellowner will spend less on customer acquisition costs, while cutting commissions in half for buyers and sellers.
Dwellowner has also recruited a number of former US Local Property Experts to the business.
Dwellowner is offering ‘tokens’ rather than shares in the business, targeting $7m from investors who will be able to buy their tokens in currencies including dollars, Euros or bitcoins.
Eckardt says this is the largest and first proptech fund-raise of its kind.
He said: “Dwellowner is a real estate brokerage powered by technology that provides consumers with a viable alternative to sell their home, saving thousands in commission versus a traditional model while empowering their licensed real estate agents.
“The company is creating a one-stop shop for all services home buyers and sellers need while making the process more transparent, efficient and cost-effective.”
Eckardt also said that his business has a lead institutional investor yet to be announced.
He said that the business is live in six US States, with an established team and the infrastructure to penetrate 25% of the US addressable market.
Asked about possible expansion into the UK, he did not rule it out. He confirmed to EYE: “Yes, we have global ambitions, although at the moment we are focused on the US.”
Purplebricks launched in the US in September 2017 but announced earlier this year that it was pulling out of the market after mounting losses.
After EYE spoke to Eckardt yesterday evening, he sent us over this checklist as to how his business – which he began to start before being recruited to run Purplebricks in the US and has now returned to – will operate:
- Balanced model with compelling proposition to both the US consumer and licensed real estate professionals to build sustainable and profitable businesses
- Everyone is an owner on day one through a progressive equity offering https://www.dwellowner.com/agents/
- Unit economics – efficient marketing spend (customer acquisition costs) through channel partners with break-even in year one
- Consumer savings – A home-seller can list as low as 1% on the sell side – “We are essentially reducing the commission in half in the US while providing a full-service offering”
- An “ibuyer offering” (sell-side marketplace to connect home-sellers with investors to entertain cash offers) “leveraging our investor network through an exclusive partnership https://www.dwellowner.com/dwelloffer/ – we are not using our balance sheet and zero fees to seller
- Team – All have proven experience in building and scaling companies in the US
‘Dwellowner is a real estate brokerage powered by technology that provides consumers with a viable alternative to sell their home, saving thousands in commission versus a traditional model while empowering their licensed real estate agents’
Having seen how stupid investors are in the UK why not give it a go! LSL how about another £20m
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What a load of yank drivel…those bullet points are hilarious.
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“Contact by secondary partner requesting mission critical supply reallocation, forward thinking proposition targeting bovine supply chain. Disruptive methodology aimed at reducing purchase lead time and improving delivery specifications. Successful strategy resulting in secondary partner’s functional improvement by 15% with a 38% increased probability of consumer consumption. Delivering reduced consumer apathy and improved engagement…”
Mr Eckhardt’s said, following his wife asking him to stop at Tesco and buy some mince on the way home, so he can start dinner a little earlier tonight …
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How do u actually get funding when you have a new agency idea? It’s not as easy as just ringing up a few hedge funds or prop tech investors.
They want to see traction. Trouble is in this tech heavy world. All the cost is now in the build .
I.e. chicken egg scenario with getting funds.
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Bless you, you asked how do you get funding? Ring up some CEO and spin him/her a line and ask them for a lot of money and they give it to you, see below, how to get £20m!!! Clearly the CEO does not care as they still keep their position when they write it off, very simple really.
“Ian Crabb, Group Chief Executive Officer of LSL, said” As reported in PIE 2017 :
‘We have been impressed by the Yopa management team, their business model and the technological capability which they have built. We are committed to working closely with the Yopa team through our strategic partnership to enhance their consumer offering and to leverage LSL’s know-how and services across the residential property value-chain. LSL aims to derive value from the strategic partnership through the potential to provide services to Yopa and to selectively leverage their know-how into the LSL Estate Agency business.
‘This investment provides LSL with a meaningful presence in the expanding online and hybrid markets and represents an attractive strategic shareholding for the LSL Group.’
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Woo! Woo! All aboard the funding gravy train!
Calling at ‘wild promises’, ‘gullible investors’ and ‘stock market floatation’. This train will terminate at ‘cold hard-reality’ immediately after a change of driver at ‘I’m off suckers’.
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Brilliant brilliant and so very true and funny at the same time
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I think it’s really disappointing that PIE continues to give a voice to these ridiculous business propositions without giving them proper scrutiny and context to the wider market.
Traditional agency makes up by conservative estimates 93% of the UK residential market. YOPA, PB and all the rest have had roughly £400m(?) come into them – yet no profit and some with major losses, and write down!
Why not do story on this? This site is fast becoming a press release site for anyone with an idea to get funding for a property related business however far fetch – you are telling me the idea of this isn’t just to get investor monies, pay some big salaries and then decide after a couple of years this isn’t working out?
He doesn’t even know where he wants to launch his business!!
Why don’t you focus on issues affecting 93% of the market, which yes this is one, but you would be forgiven by reading this website the only one!
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Surely PIE is here to report news, not do due diligence on every hair-brained idea out there.
Leave it up to us to be judge and jury!!
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Its entertaining.
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Anyone remember the old adage? ‘yanks are like seagulls they fly over here, sh*t on your head and fly off again’
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Yay free biscuits for all! Sounds a bit like JC. If investors want to continue ploughing money into a dead duck then good luck to ‘em.
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Just out of fairness to traditional estate agents (who also advertise on line, in case no one didn’t realise already)
Could the eye also publish when traditional style agents open up too, not just the “NEW ON LINE AGENCY”
Just to be fair mind !!
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Watch this space…
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