easyJet, easyCar and easyGym all made significant inroads into their respective industries, but it appears as if sister company easyProperty is not having such a smooth ride.
According to its filings, the online agent had a full year loss totalling £11.4 million in 2016, having lost £6.8 million the year before. DMZ investigates whether the emerging agent can turn things around and plug the crushing £18 million losses.
The company was launched in 2014 by larger-than-life easyGroup Chairman, Sir Stelios Haji-Ioannou, positioning itself alongside hybrid giants Purplebricks and rival online agencies eMoov and YOPA.
Upon launching, Stelios said he was looking forward to “bringing the traditional estate agency model into the digital age.”
The firm wasted no time and quickly raised a whopping £9.75 million through a unique mix of crowdfunding and private investment followed by another £25 million from a consortium of investors that included the high-flying hedge fund, Tosca.
This brings their total funding to an impressive £40 million.
Factoring in a gross profit of £492,200, the latest figures show the company’s total loss for 2016 was £10.94m.
In an official statement, Ellice said the business was experiencing “a period of further development” and admitted it was running at “a lower rate of growth than anticipated”.
Even after the chunky £40 million injection, Ellice also said “it is expected that the group will require additional funding in the foreseeable future, which is deemed to be 12 months from signing the financial statements”.
The beleaguered online portal has claimed some landmark wins since it’s inception.
Last year the firm exchanged contracts on a £35million mixed-use property portfolio on behalf of a private family trust, in what is one of the largest deal ever completed by an online agency.
DealMakerz guest columnist and PropTech superstar James Dearsley expressed his concerns, “I have always said I love online and hybrid business models but they have to look at their long term plans and pricing. Neither they nor their high street counterparts have it right yet.”
DMZ thinks the case of easyProperty shows that even with huge financial backing, entering the online or hybrid market is no easy ride.
The sheer volume of new market entrants is enough to confuse most consumers: HouseSimple, Settled, MyOnlineEstateAgent, TurtleHomes, Hatched, Door Step Agents, We Are Pad, SellMyHome, YOPA, Urban, Gordon’s, EstatesDirect, Upad, MovUno, Sell We Online – the list is endless.
There has to be some consolidation in the market. At the very least there should be a top 3 who emerge as the leading players in the market, or should that be a top 2 to join the hugely successful Purplebricks.
Seeking investment to kick-start your business is usually a wise move and can help you leapfrog others who can’t compete with your spending power. However, it’s critically important to spend the investment sensibly; some business fundamentals need to be closely examined if easyProperty are really spending over £12,000 per listing.