A property portal promising a “disruptive” pricing model for agents is raising money via crowdfunding.
LocalPropertyIndex (LPI) has set out ambitious plans to “become the property portal of choice for estate agents in the UK … through shared ownership and extremely competitive pricing … as we challenge the Rightmove and Zoopla duopoly”.
LPI calls itself the fastest growing property search engine in the world, claiming to have over 8m properties in more than 100 countries around the globe.
However, the UK page on its site is in beta testing mode and is headed: “This is for demonstration purposes only.”
LPI is using the crowdcube platform to raise £300,000 – which it says will be a 27.6% stake in its business.
In ten days, it has so far raised £222,590 from 20 investors, of whom one has put in £150,000, according to the platform.
In its pitch, LPI says that agents will be able to advertise free and only pay if they receive inquiries from potential buyers or tenants. It will charge £3.95 per inquiry.
The company plans to break even within 13 months, and use the money raised to create a marketing awareness campaign, recruit a sales team, increase investment in SEO and make improvements to the website.
Last month it was announced that Jenson Seed EIS Fund, a joint venture between fund manager Foresight Group and business support company Jenson Solution, will be investing £150,000.
In the announcement, Jenson said: “After years of over-supply in the portal industry, there are now only two major portal businesses, Rightmove and Zoopla.
“LPI plan to quickly capitalise on this opportunity and become the third major alternative offering estate agencies effective advertising with disruptive pricing.
“Both Rightmove and Zoopla charge estate agencies a fixed fee to advertise – ranging from £549 per month beyond £1,000 per month.
“This duopoly has created an opportunity for Rightmove and Zoopla and a problem for estate agencies. Rightmove has increased its pricing by 20% annually for the last three years. Zoopla increased pricing by 50%.”
LPI is based near Southampton and is run by Gary Smith, 55, whose previous business NetStore, a cloud computing provider, was launched by him and taken to a £140m listing on the London Stock Exchange.
On LinkedIn, Smith explains: “My business, LocalPropertyIndex, is already one of the world’s largest overseas property search engines.
“We connect people with estate agents and letting agents throughout Europe and the rest of the world. The business is funded by the founders and external venture capital.
“With our considerable experience and expertise in the property market, we are now poised for our next objective – to become the property portal of choice for estate agents in the UK.”
Comments (11)
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They are having a laugh! £300,000???
I always welcome competition – but £300K funding? Rightmove made £83.2m in 2012 – so they could generate that in 13 days. It makes David & Goliath look like a fair fight.
Hi Eric,
This is Gary Smith of LocalPropertyIndex.com.
The LocalPropertyIndex property portal has been developed so that we can offer our advertising services to estate agents throughout the UK. However, we will initially target our technical and marketing resources on a single region of the UK – Hampshire. This will allow us to concentrate our resources and establish our brand at the regional level. Once established in Hampshire we will gradually expand throughout the UK, county by county.
Our core competence is Search Engine Optimisation – we've been doing it for years. Our head of Technology is Dr Russell Collingham who is a world renowned expert in this field. We will use this skill to get the attention of the 5 million people that search for property on Google every month.
If we were launching our service across the whole of the UK then we would need a multi-million pound budget. However, by initially focussing on Hampshire our budget of £300,000 is more than enough to establish our position and prove to agents that our approach works.
I do like the David & Goliath image… 🙂
Gary
With the amount of enquiries we recieve from the same person often this won't be an practical or affordable way in which to compete. Sometimes the same person can send you 2,3,4 emails in a week. £11.85 to talk to the same person despite the fact you already have them and, if you are doing your job right, sent them the details already doesn't add up. Sometimes we recieve an email for the same property from both partners….
I assume the idea is that they will tell you you have an email waiting and then to click into it you agree to pay the fee. Nope, don't see this one flying a flag.
Have these guys had their head in the cloud for the last year? Missed the boat on this one.
If its going to be that busy then its going to end up costing more than the main two!! Say 20 leads a day = £80 x 30 days = JESUS CHRIST HOW MUCH !!
Hi Paul,
This is Gary Smith from LocalPropertyIndex.com. Unlike Rightmove or Zoopla who charge a fixed monthly advertising fee, with LocalPropertyIndex you advertise ALL of your properties free of charge and only pay when you receive enquiries.
You pay nothing to advertise all of your listings
You pay nothing if you do not receive any enquiries
You only pay £3.95 for each enquiry we send to you
What’s more once you've hit 50 enquiries in a month we cap your total monthly expenditure to £197.50, any more enquiries in that month are free!
…and just in case you are worried that we’ll increase your fees in the future our contracts guarantee that your fees won’t increase.
Gary Smith – 02380 987 317
LocalPropertyIndex.com – your LOCAL property Portal