Strike has an opportunity to scale up its online offering to increase its market share which, the company says has already seen ‘a dramatic jump over the past 12 month’, after securing fresh investment.
The hybrid agency, formerly Housesimple, aims to undercut traditional high street estate agents by offering vendors a free property sales service.
The company, which launched in the West Midlands and parts of central England last week, says that it is ready to expand further, with a view to offer its full service nationwide from early next year, after raising £11m via its latest funding round.
The investment has been partly provided by two new backers of the business – Sir Peter Wood, via SPWOne, and Channel 4 Ventures – with further funding from existing investors Freston Ventures and Toscafund.
Strike has its sights set on becoming the largest UK estate agency brand next year, surpassing both traditional and online counterparts.
Also backed by Sir Charles Dunstone, an early investor in the business, the latest funding round will also enable Strike to increase brand awareness through Channel 4 Ventures’ investment in a media-for-equity deal. This is where the broadcaster provides airtime in return for an equity stake in the business.
Sam Mitchell, chief executive officer at Strike, said: “We set out to shake up the estate agency industry when we first launched our sell for free service in 2019, and now we’re focused on expanding our digital-first offering through strategic investment and innovation.
“It has been a year like no other for the housing market, but we’ve managed to succeed against the odds. Having the likes of Channel 4 and Sir Peter Wood on board will allow us to continue turning the industry on its head.”
The investment by Sir Peter Wood, founder of the technology-based insurance disruptors Direct Line and esure, and founder investor in GoCompare.com, is one of the first to be made by his new SPWOne investment vehicle.
Wood commented: “Strike’s clarity of proposition and innovation captured our attention. The business’s approach to moving home, supporting customers at each and every stage of their transaction and experience, resonated with us and we believe the concept has considerable potential. I am pleased to be part of the Strike journey and look forward to supporting the business as it develops.”
Vinay Solanki, head of Channel 4 Ventures, added: “Strike’s disruptive ambition to redefine the way people move homes resonates with our own challenger brand values and sits well within Channel 4 Venture’s growing investment portfolio, which we’re focused on scaling as part of our Future4 strategy to diversify new revenue streams.
“We’re looking forward to seeing the growth of such a forward-thinking business with the help of Channel 4’s powerful marketing platform to elevate the awareness of this exciting new brand.”
Comments (15)
Plain awful business plan. Hoodwinking naive sellers into believing they are selling for ‘free’ (more like selling for less such is the general level of incompetence experienced whenever you buy cheap) whist they are actually overpaying the obligatory solicitor referral a kickback in return for sub standard work. The new sponsors ought to hang their heads in shame – like all their predecessors. Disrupters? Disreputable more like.
Can anyone decipher what the results are for this company for the last year of results?
Having fairly recently set up a new sector within an existing business the goal was to produce a strong profit with an expectation of delivering something meaningful bottom line within 2 years-significant profit before 5 at circa 20% ROE. looking at the amount of money being spent in these businesses I /my team, could have produced more revenue very easily than say this company has- but I more than likely would have posted a loss. Am I completely naive thinking top line vanity bottom line sanity ? I have over 30 years in the business.
A contact number for easy access to this never ending source of cash would be greatly received I am sure to all PIE readers ?.
Strike only completes on 3,214 properties a year, out of the 1.2M properties that complete annually. Strike has been around since 2007, formerly branded Housesimple, and in 14 years they have only ‘helped’ 45,000 people to move. So in 14-years, there have been 16.8M completed sales in the UK, Strike has had only 45,000 of that pie. Bearing in mind they offer a freemium model now; this is a business going nowhere. In comparison a traditional one branch agency completes on 140 sales a year, and they charge proper fees, so Strike would only need to have 27 traditional offices to be completing on 3,214 sales. A cold start branch, needs 165K of seed capital, in year two breaks even, paying all that seed capital back and in year three makes 80k profit, by year five making a 250k profit. 27 branches, as cold starts in 2007, would be £4.45M of seed capital, 2009 all capital repaid, by 2013 investors would be making 27 x £250,000 gross profit, 6.75M. In the next 8 years even allowing for underperforming branches the cumulative gross profit, would be say £5M x 8, lets call it £40M plus of PROFIT. Instead, tens of millions have been poured in, another £11M being wasted, give me a call, and lets use that 11M to cold start 65 branches tomorrow, and all investors in 36-months would have their capital back and maybe some profit. There is a lot of snake oil and emperors’ clothes going on – with SaaS as the new Messiah, I know a thing or two about that as well, so maybe 30 branches and the rest of the cash into the new model of agency we are on the cusp of.
Andrew, Who has ever has called you an influencer?
er – Andrew has – no one else.
Anyone who calls themselves an influencer is right up their own arse.
“…in 14 years they have only ‘helped’ 45,000 people to move. So in 14-years, there have been 16.8M completed sales in the UK, Strike has had only 45,000 of that pie.”
Sorry – but those figures simply don’t stack up… and here’s why.
Strike claim to have helped 45000 people to move home – but no-one is questioning HOW that number is arrived at. Is it:
* 45,000 sales completed?
* 22,500 ‘sets’ of sellers & buyers?
* 15,000 families with 3 people average per completed sale?
* 1,000 completions involving 45 people per chain?
As usual it’s a case of “do the maths” and come up with the answer they want you to based on the big number quoted, rather than the reality.
Their other website claim is
“£4.4bn of property sold since launch”
So – let’s do the maths on that one.
Let’s assume that by “sold”, they are actually referring to completed sales.
Let’s further assume that those completed sales were all “sold” by them.
In other words, let’s assume that they don’t make up the numbers like others have been proved to do.
SO… £4.4Bn divided by 45,000 equates to an average sale price of £97,778. That’s quite a chunk indeed lower than the current national average of around £250k (LandReg figure for April). But of course that is over a fourteen-year period – prices have gone up since those early days.
So to another quick check on LandReg, which shows that the average selling price in January 2007 was £176,758. There have been ups and downs in the period to get where we are now – but it would appear that an average ‘sold’ price over that period of somewhere near double what HouseSimple/Strike would have sold for IF they have, in fact, ‘moved’ 45,000 homes from ‘For Sale’ to the statistics page of LandReg.
And, interestingly, 22,500 completions would be much closer to the mark.
Mr Stanton suggests that 45,000 out of 16.8 million isn’t an impressive number. That depends on where you stand, I suppose – as every sale is collectively vital in making up the numbers… …but it is twice as impressive a number as what appears to be the reality.
Unless, of course, Mr Mitchell would like to stick his head above the parapet and put the record straight about the numbers.
That could be fun…
Very interesting. Peter Wood has had more business success than anyone commenting on this website, so the unit economics must look good or else why would he invest? The model of ‘cheap fee plus higher margin add-ons’ is not new and my guess is the main challenge is flakey sellers who are not invested in actually selling.
Mr. Woodford’s track record wasn’t shabby, nor Mr. Desmond’s yet somehow neither had the midas touch to make disruption operationally viable.
this free model is actually beneficial to a lot of agents who use the argument, “if you want to go cheap you might as well go free”. Using Strike against Purplebricks or cheap fee competition is a valid strategy. If you are going to lose an instruction it might as well be to an agent whose investors are happy to buy the listing from your competition.
“Agency is as much about influencing the outcome of the listings you don’t win as the ones you do” (credit George Woodward – 1986) Haggling down the commission rate of properties that were overpriced, difficult to sell or whose owners deserved a much, much lower fee was something I learned in my first year in agency
So House Simple did not make any profit when it was cheap, so therefore the problem must be that they were charging too much! Therefore lets make it free and rely on referral fees. IF Strike works on a National basis ( I don’t think it will, people are not that gullible) then I can already see the newspaper headlines about the rip off fees and the potential CMA investigation.
In any other country, estate agency would not be seen as an industry that was broken. It has for years ( and before online ever came along) had fees that were the cheapest in the developed world.
There are many things about transacting property sales that need to be improved, but all of this investors money going into companies trying to make an already cheap process cheaper shows that these people either do not understand the problem or even worse do not even realise what the problems that need solving are in the first place.
Looks like some never learn.
I was doing some market research in the City of Sheffield last week, and the market share of Strike was quite an eye opener – decent numbers.
I would like to know what they have been doing in Sheffield to get the number of listings they did in the last 12 months
Yes to be fair they aren’t short of inventory 5,468 acc.to ZPLwhich is not a country mile from Bricks 7.715 and they haven/t even rolled out nationwide
They have been very quiet on actual revenue though
Should imagine many hard nosed Yorkshire folk from Sheffield would jump at the prospect of a free lunch and then faced with the option of having to pay £699 for accompanied viewings would be bellowing outhe Yorkshire war cry “How Much! Nay lad that’s a lot of brass I’ll be doing that meself “
Oh dear. You would have thought it was a case of once bitten ,twice shy with “estate agents”
Channel 4 having invested in Emoov in March 2018 in a blaze of publicity they saw their investment disappearing over the horizon with its backside on fire just a few months later in December as Emoov went west.
They can only hope that lightning doesn’t strike twice.
One day, one of these unregulated businesses will stick and drag us all down.
Bricks has killed many things already.
Won’t take much if money behind it.
Look at brexit.
“One day, one of these unregulated businesses will stick and drag us all down.”
The entire industry is unregulated, Bless You. And “regulation” will not stop a business (or businesses) from sticking.
As for it (or them) dragging us all down – that will only happen if “we” allow it.