Losses mount at online agent Yopa as it reports going £32.35m into the red

Online agent Yopa has filed accounts at Companies House showing a mounting loss of £32.25m.

The latest accounts cover the 12 months to the end of December 31, 2017, but were only signed off on January 9 this year.

The loss reported appears to be a cumulative total of £32,250,786 over two years, up from the £14,240,560 reported the previous year (2016). It means that in 2017, Yopa added further losses in the region of £18m.

The accounts are silent on turnover but state that as the company “is still in early growth phase, it is currently loss making”.

Notes forming part of the financial statement filed at Companies House state that Yopa has historically relied on capital contributions from its shareholders, and expects to depend upon its shareholders and investors for financing “at some point in the next 12 months depending on market conditions and trading results”.

The statement goes on to say that to continue as a going concern, the company must generate sufficient operating cash flow or secure new funding: “Whilst the directors have instituted measures to preserve cash, there is uncertainty over future trading results and cash flows . . .

“However, as there is no contractual guarantee of future funding from its shareholders, this represents a material uncertainty.”

The notes state that as at November 30, 2018, the company had a cash balance of £12,556,481, net assets of £14,054,537 and net current assets of £12,434,685.

During 2017, Yopa employed an average of 97 people, up from 38 in 2016.

Three of the six directors who held office during 2017 and up to the date of the report are named as Daniel Attia, and Alistair Barclay and Andrew Barclay.

The other three are Ian Crabb (group CEO of LSL, who was appointed a director last August), Manuel de Carvalho (CEO of the Daily Mail company dmg ventures) and Yopa’s CEO Benedict Poynter. Both the Mail and LSL are major backers of Yopa, which is currently lying second behind Purplebricks in terms of listings by UK online agents.

Yopa’s next accounts, for the year to the end of December 2018, are due by September 30 this year, suggesting that those filed for 2017 may have been late.

LSL, parent company of brands Your Move, Reeds Rains and Marsh & Parsons, invested £20m in Yopa in September 2017, along with an additional investment of £7.6m by Daily Mail and General Trust following an earlier investment of £15m.

Savills, via its investment arm Grosvenor Hill Ventures, backed Yopa in June 2016 leading a funding round of £16m.

Yopa was founded in 2014. Co-founder Daniel Attia, 23 at the time, became its first CEO but was succeeded by Poynter last April when Attia became chairman.

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37 Comments

  1. Property Poke In The Eye

    Any chance of a refund 😉

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    1. Bless You

      Any money they make goes directly into more marketing.

      I tried AdWords for 3 days and it cost £50 a day. Created nothing and it might have been tenants not sellers who clicked for all I know.

      See Every click is a pint of beer. That hurts .

       

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      1. GCaling01

        I don’t think Adwords is entirely to blame for you not getting any leads, especially considering just how almost creepily precise you can make Adwords targeting these days!

        It may not be the kind of ‘set it and leave it’ advertising most agents are used to, but by just spending 10 minutes a day tidying it up we’ve got our CPA for market appraisals down to £54 each this month through Adwords – it’s nothing to turn your nose up at!

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        1. smile please

          Average cost of a click is just below £3 for estate agents. Google themselves said it takes 38 (if i remember correctly) for a meaningful click on estate agency.

           

          A meaningful click means anything, from your telephone number, to look at your properties etc etc …

           

          Factor in its probably 10 of those click for a true meaningful click i.e. telephone call for business. Means it costs you £1140.00 for a true lead.

           

          Lets say a slightly below average agent converts 1 in 3 to an instruction means to list a property can cost £3420.00

           

          This is reinforced by Russell Quirk and Yopa’s cost per acquisition of £3000 to bring in just £1000

           

          PPC in a cold wars arms race , the more you spend the more your competitors spend. Its a very overcrowded market.

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          1. GCaling01

            Hey Smile,

            Full disclosure: I’ve been working as an in-house digital marketing manager for a multi-branch, independent estate agency for the past few years. Prior to this, I worked in several full-service digital marketing agencies for a number of years.

            Comparing the spend of national online brands like Yopa or Emoov to the local strength of an established online agent is frankly like comparing apples and oranges. It’s also important to consider that the amount an agent is willing to bid per click is only a fraction of the full equation Google takes into account.

            Simply put, Google values relevance. Relevance of the user’s search query to your keywords, of your keywords to your ads, and of your ads to your landing pages. By being smart with the journey you send your users on, you can compete with brands with much better-funded pockets (i.e. PB, Yopa, Emoov) and get a better result, whilst spending less.

            Unfortunately, Google doesn’t encourage this behaviour – they’re a business after all and Adwords makes up 98% of their profit. The more they can get you to spend, the more profits they make. Adwords is full of big flashind red messages that encourage you to up your bid at the slightest inconvenience.

            Being able to slowly grow campaigns that are targeted and relevant is something independent agents can do that national agents can not. By trying to simply match them bid-for-bid you’ll end up in the ‘arms race’ position you described, and they’ll be able to outbid you every time.

            If you want to read a little more, there’s a great article you can find here that covers some of the pitfalls many small businesses run into when running an Adwords campaign, and how to avoid them: https://www.koozai.com/blog/pay-per-click-ppc/google-adwords/adwords-for-small-businesses/#

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        2. Bless You

          Agree you can make precise…but you never know if person was looking for your brand anyway.

          To much whistling in the wind for me.

           

          I use negative words etc. ( don’t understand how large companies AdWords their own businesses) must have money to burn.

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    2. J1

      Very careless of them.

      You cannot have a refund if they have inadvertently lost your money for you now, can you ?

       

       

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  2. GPL

     

    Ladies & Gentemen ……look under your seats and you will find your YOPA (YO UR  PA  RACHUTE)!

     

     

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  3. JVSOZ

    Another one bites the dust…

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    1. P-Daddy

      Some deep pockets behind them, but always using additional rounds of funding and equity issues! An easy market flattered the disruptors as I said about 18 months ago. Hype and the new ‘Generation Entrepreneur’ (GenE) and crowdfunding accelerated the interest, but now good old fashioned market forces and debt management are going to be the great leveler. All new businesses take a while to embed and will be loss making in the early years. The property owning and renting public are now very aware of their presence, so is that enough to monetise them! The question is whether those who jumped on the bandwagon will have the same appetite when the hyped business values never materialise and are valued based on cash flow, profit and not just brand alone!

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  4. JonnyBanana43

    Another successful “disruption”

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  5. ArthurHouse02

    Question. Why are these accounts filed so late? Is it because they are trying to hide trading losses for as long as possible? Does the law not state that accounts have to be filed within a certain period?

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    1. Mark Walker 2

      Usual rule of thumb is file **** accounts as soon as possible, to reduce your tax liability.  Maybe it’s different when it’s investors’ money.

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      1. Typhoon

        There is not tax liability as there are no profits!

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  6. Chris Wood

    If I was an investor I’d be looking long and hard at all the claims, statements and promises I was made by these firms.

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  7. OnlineEA

    Interesting reading…significant millions of losses and yet sits just ahead of Express which is apparently self funded and has zero debt. Yopa are going to need a serious bail out soon or will become Emoov2

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    1. ArthurHouse02

      Must be a Yopa employee/owner reading these, so many “thumbs down”. Express agency is to be heralded, they go about there business without banging on about the usual rubbish. They appear to be a well run business

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      1. Woodentop

        Over charge and under value and we are not talking YOPA.

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  8. mro123432

    Well this comes as a huge surprise. I was under the impression onliners were the way forward after the huge success of emoov

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  9. AgencyInsider

    How to make a small fortune in online estate agency….Start with the big fortune.

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  10. Ostrich17

    Things are not looking good – an equity issue post year end raised £20 million from existing shareholders. It looks like losses for 2018 will be even higher.

    The next few months are going to be interesting for some of the Call Centre Agents – we could run a book on who will need more cash first.

    Probable running order:-

    1. House Simple – April/May

    2. Yopa – June/July

    3. ANO – ?

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  11. Yorkshire Agent

    And I thought the purpose of running a business was to make money, perhaps this only applies nowwhen it is your own money!

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  12. Woodentop

    When you look at the business model of ALL on-liners only agents, not one of them stacks up to be viable business. It is all based on Utopia and having the lions share of the market … a numbers game. Numbers they can never ever hope to achieve. Without some fool falling for the publicity of making money from their investment, not doing their homework and driven by people who are only in it to make money for themselves while the gravy train keeps arriving. When will the markets wake up to this fact “Not one new breed on-line agents after years, has succeeded”. It amounts to fraud and scandalous that it is allowed to continue.  
     
    Warning to any investor, why do you not have security linked into your investment with these companies? Because there is a high probability the business will make massive losses and fail. This has happened before with the financial services sector who tried it, didn’t you learn from that experience! The only winners are the fat cat directors. Am I wrong … well find me one of these so called new breed hybrid disruptors that hasn’t failed, find me one major mainstream financial institution who has backed them as a viable with cash.

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  13. Mark Walker 2

    Being a call centre agent sure is fun (it’s investors money).

    Interesting someone has been through and down-thumbed everyone’s comments, but nobody has posted a grass-is-greener supporting argument.

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    1. PeeBee

      Is this a new, bright and shiny out-of-the-box Mark Walker – or the old, original, bright-and-shiny Mark Walker who lost his password?

      Either way – comment on point.

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  14. WiltsAgent

    Online estate agency has now been around for over five years and the only people who have made any money out of it are the Bruce brothers and various advertising agencies. For how long are these ‘investors’ going to keep tipping money into a black hole?

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    1. PeeBee

      WiltsAgent
      I think you’re safe to say “over TEN years”.

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  15. nickk25

    I worked for these guys and was one of the early ones. I used to sit in meetings with Andrew Barclay. I could write a book of my 14 months there. In fact I’ve written a blog but wont post for fear of being sued!

    Suffice to say that is an excellent business model…for the directors. There were many innovative things that genuinely worked about the model and in a buoyant market I believe they would have taken a greater market share. However, the agents are run ragged and, whilst they were fortunate enough to employ some very good quality agents that genuinely cared about the customer, these agents couldn’t physically cope with the volume of clients they had to look after. I brought this up early on and I tried to stick it out. There are ways this model could work better and they needed to listen to the agents. Instead the focus was on numbers and volume of new clients without a general care about selling. From the directors point of view this was to secure more funding by showing their “growth”.

    You cannot grow that quick without compromising service and putting a huge strain on staff. I have always said the high street lean closer to the “online” route and the “hybrid/online” will need to move closer to the high st (having hubs),a bit like the Keller WIlliams model in the US) and they will meet somewhere in the middle.

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    1. P-Daddy

      Good points.
      The business model is so front end loaded, its the only way they can justify their business plan. The savings on premises costs have been offset by advertising on tv and radio and other media, hence the Daily Mail involvement. The have to get stock to create the habits with the buyers. The BIG issue in particular with the sales side of the business is that people will be living longer in their houses, so this is not an annual transaction like holidays/insurance etc.
      With the new housing boom at an end and when the ticking time bomb of Help to Buy rears its head, they will need higher fees to keep feeding the beast. They and others have helped reduce the size of the cake that everyone is trying to live off, but the have underestimated the quirkiness of the UK housing market. It is more black art than pure science. A tough market will start sorting these businesses out very quickly, as it is the High Street. The difference is, that these new businesses have so much third party funding and stock market links or aspirations, and those markets are ruthless. The High Street agent will trim their cloths in the lean years.  This is one thing that is clever about Zoopla and uswitch and other data mining…they can keep in touch throughout a home cycle after purchase/rent!
      I like your comment about the biz being only to benefit the directors. In the accounts, there is a note that 1 of them is creditor  to the tune of £172,000 for lead generation! And there is a related transaction to the directors for a property lease…with the Ritz Hotel (London) The clock is well and truly ticking on this lot.

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    2. PeeBee

      nickk25 – welcome to the world of posting on EYE.  And an interesting post it is at that.  I would write that book if I were you.
       
      I’d like to home in on one thing you said, if I may – and hope to discuss this further.
       
      “However, the agents are run ragged and… these agents couldn’t physically cope with the volume of clients they had to look after.”
       
      Actually – yes, they could.  They could each employ a Sales Manager; a couple of negs, an administrator, an accompanied viewer and, for future growth, an apprentice.  They could then rent a nice building to put these people in – and then customers could quite easily visit them to discuss their transaction.
       
      That’s what thousands of other Agents have done in order to “physically cope”  – and it works quite well in the vast majority of instances.
       
      Whether your envisaged ‘halfway house’ will ever provide the ideal solution is to be seen – but it’s a fair chunk better than what the current offering provides – so let’s watch and wait.
       
      Look forward to more discussion.

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    3. Anthonyw

      nickk25,

      I think there will be success with the online model but think it will be a hybrid version of it that will ultimately succeed. Keller Williams model might be the one to do it? I personally like the idea of hubs too as think in the future having a high street presence will become too expensive for agencies (for some they are already). I read something a while back about what I can only describe as ‘mixed hubs’ as cannot remember the article or the terminology used, but basically having multiple agencies working in hub spaces like co-working. It kind of makes sense in may ways.

      I posted an experience told to me regarding Yopa in another post and I suppose your insights have gone some way to explain the problems/reasons the couples where having a bad time of it.

      HystreetJay,

      I think we have read same article. Agree with you that online wont go away, it is in its infancy and it will be innovated (probably already is being as we speak). Like any ‘first to’ think friends reunited, myspace etc. Facebook was an innovation of those. It is only a matter of time before it fully happens with online model where someone gets it right.

       

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      1. AgentV

        I believe the model that will win is the one that delivers a very high level of personal service for a reasonable fee. Been working on it for four years now, including software development.

        BSOS23PC

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        1. Anthonyw

          Agree and good luck with it and share it here when you are ready as would love to hear about it.

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  16. HystreetJay

    I was reading an article the other day that said price was NOT the main driver for the consumer using online agents…so what is it?

    In my opinion “Online only” will not last but there is definitely a demand for the transparency and convenience from the tech used by them.

    I feel for the high street agents that think the online/hybrid world will just disappear….Evolve with the consumer don’t bury your heads in the sand!

    How did you book your last holiday?

    Online banking?

    Online shopping?

    We live in a digital world where we have control at the touch of a button.

     

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    1. GCaling01

      Jay, have you read the governments latest research on buying and selling homes?
      https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653581/buying-selling_homes-research.pdf
      It seems people’s biggest complaint with estate agents as a whole isn’t fees but lack of communication. I think if you look at people chosing onliners because they think the online aspect will keep them up to date the same way social media, whatsapp etc pings at you 24/7 it suddenly becomes a lot clearer as to why people with busy lives may choose an online agent for the apparent convenience.
       

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      1. J1

        A laptop, tablet or phone cannot show somebody around a house.
        Nor can a laptop rescue a sale after the seller texts the buyer to tell them what they think of them when the buyer draggs their feet?
        This is what on-line cannot overcome.  Not yet anyway.

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        1. GCaling01

          I absolutely agree with you there, J1. Every good agent knows that prompt, persistent, and importantly thorough communication goes a long way to making all parties feel like they’re in safe hands.

          I don’t know all the answers, but it makes one wonder what more agents must do if even then, most sellers’ biggest frustration is feeling like they aren’t being kept in the loop. Or is it a case of a few bad eggs spoiling the bunch?

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