Still counting the cost: The millions poured into online agents

In February last year (2018), EYE reported that almost £250m (£249.5m) had been raised between ten online agents alone. Of that money, nearly 40% had been raised by Purplebricks.

We have attempted to provide updates, where possible, since February 2018.

In summary, since February last year, Emoov has gone into administration, but was bought in January. Tepilo has vanished. Hatched has been closed down. House Network is in administration. Yesterday, Purplebricks parted company with its CEO and pulled out of Australia.

February 2018 – Purplebricks: £97m
Purplebricks raised £22m ahead of its IPO in 2015, £25m at its IPO, and a further £50m through an issue of new shares in 2017.

Update: In March 2018, German publishing group Axel Springer put £125m into Purplebricks, in exchange for an 11.5% stake, paying an 8.6% premium, at £3.60 a share. In July last year, it upped its stake to 12.5%, buying 3m more shares at £3.07 each. Axel Springer will be counting the cost, given that Purplebricks share price has more than halved since.

To enable Axel Springer’s stake in March last year, co-founders Michael and Kenny Bruce, together with a non-executive director William Whitehorn, sold some £25m worth of shares to the publisher. The bulk, £24.12m, was sold by the Bruce brothers, of which most (almost £16m) were sold by Michael.

The biggest shareholder remains Neil Woodford, whose funds own some 27% of Purplebricks (according to The Motley Fool earlier this year).

In May last year, the Bruce brothers entered the Sunday Times Rich List for the first time, with an estimated wealth of £190m, ranking them as the 630th richest people in the UK.

In February this year, Purplebricks issued a profits warning and announced the departures of both its UK and US chief executives. In April, Berenberg Bank reduced its price target for Purplebricks by over 80%, saying it had “flown too close to the sun”.

Yesterday, Purplebricks announced that co-founder and CEO Michael Bruce stepped down, that it is pulling out of Australia and is reviewing its US operations. Yesterday, its share price closed some 12% down at 119p.

2) Yopa: £58.6m
Yopa won the backing of Grosvenor Hill Ventures, the investment arm of Savills, when it was just six months old, with £16m in funding. It raised £15m from investors including Daily Mail and General Trust (DMGT) and Grosvenor Hill Ventures in May 2017. That was followed by another £27.6m in September 2017, of which £20m was from LSL Property Services and a further £7.6m was from DMGT (the Daily Mail).

Update: Yopa filed accounts in January this year, covering the period to the end of December 2017, showing mounting losses of £32.35m. In March this year, LSL wrote down its investment in Yopa by 60%, taking the value of its stake down from £20m to £7.8m. In April 2018, CEO and co-founder Daniel Attia became chairman and Ben Poynter took over as chief executive.

3) Housesimple: £33m
Housesimple, launched in 2007 by Alex and Sophie Gosling, raised £13m in a funding round led by Carphone Warehouse founder Sir Charles Dunstone and his business partner Roger Taylor via Toscafund Asset Management and Freston Ventures. That was followed in December 2017 by another £20m investment

Update: In January this year, accounts filed at Companies House show that in the year to the end of March 2017, Housesimple’s losses rose to £13.5m. At the same time the company revealed receiving £2.5m by way of loans, plus further investment of £1.5m. The company is currently offering its services free to sellers in the north of England. As with Yopa, there were changes at the top: Housesimple is now led by CEO Sam Mitchell who took over in January 2018. Founder Alex Gosling was moved to the role of president.

4) easyProperty: £27m
EasyProperty started with a £1.4m round of crowdfunding in 2014, followed by a £9.75m share placement in September 2014. A third round of funding in 2015 saw it raise another £16m from Toscafund prior to its merger with GPEA.

Update: In January this year, E-Prop Limited reported losses of £9m with liabilities of almost £23m for the period covering October 1, 2016, to the end of December 2017. The company is in the same stable as the Guild, Fine & Country and easyProperty. Last August easyProperty confirmed that some franchisees on standard 12-month rolling contracts had given in notice. In June last year, easyProperty appointed Russell Humphrey as managing director; he joined from Yopa.

5) Emoov: £16m
Emoov has raised £16m over four rounds of funding, including £1.95m in 2014, £1.5m in January 2015, £2.6m in October 2015, £50,000 in December 2016 and £9m in August 2017 from venture capitalists.

Update: Emoov went on to raise a sum of almost £2m last summer in a new crowdfunding campaign on Crowdcube, after merging with Tepilo and an online lettings firm, Urban. It said that the merger had attracted an additional £6m from additional shareholders. It had ambitions to float on the stock market early this year. However, in December last year, Emoov went into administration saying it had run out of money because funds promised during the merger did not materialise.

6) EweMove: £9m
EweMove was self-funded by its founders until The Property Franchise Group bought it for £15m of which £8m was upfront and £7m deferred subsequently re-negotiated to a total of £9m, which has now been fully paid up.

Update: Founders David Laycock and Glenn Ackroyd sold the shares they received. TPFG insists that EweMove is a success story, with its 125th franchisee just recruited.

7) House Network: £5m
House Network, founded in 2004 by current CEO Mark Readings, grew organically and received only low levels of funding until a 2017 cash injection of £5m from private investors. It aims to break even within two years.

Update: House Network went into administration in March this year. It was immediately sold out of administration to Universal Acquisitions Limited, which ceased trading in April. The administrator has revealed that House Network took out a loan of £1.5m in 2017, and that in 2018, received a further £5.7m from investors.

8) Settled: £2.4m
Settled has raised £2.4m, including around £150,000 in seed funding in November 2014, followed by £1m in July 2016 and then another £1.2m in June 2017 from venture capitalists Connect Ventures and Piton Capital.

Update: Settled very rarely courts publicity – the most recent press quoted in its ‘recent press’ section on its website appears to be September 2017. It is currently offering vendors packages from £499. Its founders are brother and sister Paul and Gemma Young. Its last accounts for the year ended September 30, 2017, show total equity of £631,635, and cash of £583,287.

9) Sellmyhome: £1m
Director Will Clark said: “To date we have received around £1m investment and the business has yet to receive external funding.”

Update: In January this year, SellMyHome revealed that five people lost their jobs before Christmas.

10) £507,000
Akshay Ruparelia, who founded Doorsteps last year while still at school, initially raised £7,000 from family followed by £500,000 on crowdfunding platform Crowdcube last summer. The largest private investor in that round was Julian Mylchreest, a senior managing director of Bank of America Merrill Lynch.

Update: Doorsteps returned to crowdfunding last October, aiming to raise £400,000 with the pitch on Crowdcube, “the high street is dying”. EYE estimates that Doorsteps has now raised £1.3m.

Outside these ten, EYE contacted some other online agents, including Hatched, owned by Connells. The firm declined to comment when contacted by EYE last February.

Update: Hatched was closed by Connells last September. Connells said the hybrid/online business model was fundamentally flawed.

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  1. 40yearvetran08

    Whilst you can appreciate that there are idiots out there who will invest in something they just do not understand where does that put the people at Savills and LSL who pumped in millions to yopa? Are the people who made those decisions still employed and if so why? They gambled shareholders money on a business which is unlikely going to make it. In the case of LSL £20m would have gone a long way to have sorted out thier own problems which resulted in closing all those offices and making 100’s of staff redundant. Decisions made have to come with taking responsibility which is why the directors of these companies are paid disproportionate salaries, they just never seem to feel the pain though of making bad decisions. Brush it under the carpet, give them a pay rise and onto the next cockup.

    1. Bless You

      Those same people have also cost their own businesses countless millions in fee’s fella.  The industry has been destroyed. 

      1. Bless You

        Believe you me fella, the only one winning this war is bigger then H.. 
        His name is G and he owns AdWords.
        For the love of Jesus , they are all sitting in silicon valley making billions and our gov’t, has no problem with it.
        They are all it,, it goes right to the top. 
        Bless you, over an out

        1. GPL


          They’re all “Bent Proper” Laddie!



          1. Bless You

            And So help me god we’ll get every last one of them so we will. 
            Here is the list:
            Bruce – killed
            Rightmove – Still at large.
            Onmarket – gone covert.
            Bricks Lpe – shoot on first sight

            1. surrey1

              Amazing how many investors did come up the Lagan in a bubble

  2. Hillofwad71

    There have been a whole host of others pitching recently for investors money on Crowdcube which have failed to raise targets and  had to withdraw their pitch including 99 Home  and I Love Homes.The well has become dry

    Reputational damage to the sector arising from Russell Quirks quick demolition of investor’s funds last summer .I bet his new PR firm hasn;t been invited to promote Crowdcube

  3. ArthurHouse02

    Some of the companies in this list spawned due to people freaking out when they saw PB gaining some fame. YOPA is a great example of that, agents desperate to have a stake in the Quirk promised 50% share or whatever it was of the market.

    Yet all they are now doing is flushing money down the toilet. If Savills and LSL had pumped this money into their existing businesses would that not have benefitted them more? How much money did Countrywide wasted on their online offering before realising it was a waste of money?

  4. OnlineEA

    I’d argue one the biggest and most successful online agents (although not budget upfront fees as they’re no sale no fee) is Express Estate Agency.  They’ve been quoted before on here as saying they self funded with multi million turnover and zero debt.  Strange they don’t even get a mention in this story?

    1. Ostrich17

      If you look at Express EA accounts you will see they are suffering the same as the other weaker online agents since 2014 when their turnover was nearly £10 million.
      Cannibalisation of the callcentre sector by the likes of PB/Yopa/HS resulted in a dramatic fall in revenue for those who did not spend heavily on TV advertising.    

      1. GPL

        Express EA are lamentable …..posing as Fake Agents, they are no more than a cheap mailshot operation.

  5. AgencyInsider

    Give me your money and I will make you rich beyond your wildest dreams.

    It’s the oldest con in the world (after ‘Of course I’ll marry you if you get pregnant’) and it will always sucker the Gullible and the Greedy into parting with their dosh. C’est la vie.

  6. smile please

    To be honest reading these vast sums of money pumped into these failing or failed businesses is frankly sickening.

    I and others have to invest our own money into our businesses and pay everybody on time every month. We offer a far better service and have a far better success rate yet it’s not independent owners that get the headlines.

    The things I could do with just 1% of what has been invested in YOPA alone would show a better return for investors.

    Yes a bit of this is jealousy but it’s a shame good guys don’t prosper just liars and cheats

  7. AgentV

    Thank you PIE for an article giving all the information I wanted to know.
    If only we had a definitive figure of how many properties have actually completed their sales, that we could compare to this amount of total investment (plus the total up front and other fees charged)….so we could calculate the true FACS…Fee Amount per Completed Sale!

    1. smile please

      Okay i have to ask …… What the heck is the BSOS23PC on the end of the post about?

      1. Woodentop

        He’s been waiting a long time for someone to ask that question.

        1. smile please

          I know i bit *Hangs head in shame*

  8. Property Poke In The Eye

    Axel Springer £125m…ouch!!!  Even I felt his pain when reading this article.

  9. cyberduck46

    >The company is currently offering its services free to sellers in the north of England


    Seems a bit out of synch. with what has happened at eMoov. That tells me either management is crazy or they believe they have medium to long term backing from investors.







    1. Ostrich17

      HS have recognised that the market for callcentre listers is limited and they have deliberately targetted their immediate competitiors in the sector through TV/Radio advertising.
      If they have secured more funding, they may well take further market share from PB – who have over-extended themselves and could unravel very quickly in the coming weeks as culling of the Bruce management team gathers pace.  

  10. VSW

    How can it be legal to generate wealth in the region of £190m from a business that hasn’t made 1p in profit? Scandalous!

  11. Woodentop

    If you were an investor …. would you know want to touch on-line agents with a barge pole!

  12. KC54

    Are there any on-liners, whether sales, lettings or both that have actually made any money?


  13. watchdog13

    How will any On line agents be able to raise more funds from investors now that it is pretty clear that the model doesn’t work? It means that the ones left standing need to stop the cash drain and reduce the ridiculous marketing budgets, which will mean less business and continued losses, ending in ….?

    Staff at these companies must see the writing on the wall and they will either leave or not be able to attract quality employees.


    1. Woodentop

      You make a very valid point. Employees must be wondering what their future holds, do they wait and see and get dumped or take control of their destiny and jump ship? Quality employees wouldn’t be expected to wait or someone is going to get the job before them!

  14. Woodentop

    No posts from The Future is Tech or The Prophet …. I wonder why!


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