Hybrid estate agency Yopa is not one for playing by the rules. The company’s adverts poke fun at itself and have featured an unusual mix of celebrities including ageing disco legends the Village People and Olympic gold medallist Mo Farrah.
This unconventional approach continues at its London offices. While taking a lift to meet the new CEO Ben Poynter, a small bulldog follows me in and, as we are hoisted skyward, it bares too many teeth at me for my liking.
We spill out into a reception area dominated by a neon effigy of my companion; the dog is one of two canines that roam Yopa’s offices. These include two floors full of IT staff and marketeers all located behind the Ritz Hotel in central London.
Ben has an equally diverse background. After spells studying business and economics in California and Cambridge and a first job at a City investment firm, his career moved off into tech and then theatre production and later a spell at London’s Time Out media business.
With a strong financial background, he arrived at Yopa in July 2017 as CFO, only to get the top job in March this year after co-founder Daniel Attia made way and became the chairman.
Rumour has it that the investors backing Yopa to the tune of £75 million wanted someone with broader business experience to steer the ship. Attia, after all, was only 23 year old when he established the company in 2014.
“We have a huge amount of estate agency experience in the business and as a CEO I need to look at it strategically so I don’t think it’s necessary to have industry experience,” says Ben.
The challenges facing Yopa are considerable, although Ben’s un-flustered presenting style hides it well. His company, like its key rivals, is competing in a brutal race to gain volume in order to attain profitability and market share.
Purplebricks has already achieved profitability in the UK and Yopa expects to achieve the same once, like its purple rival, it’s listing approximately 55,000 properties a year.
The millions of pounds invested in Yopa, which was recently topped up with £20 million from existing investors including Savills, is being spent on a new, larger call centre just opened in Watford and a rapid increase in the number of local representatives. Like Purplebricks, these are operated through a franchising system.
Ben reveals that after starting out with 100 at the beginning of this year, Yopa now has 180 representatives on the road and expects to hit 300 in a year’s time. And like many of its rivals, Yopa recently changed its fee structure and offers both a ‘pay now or later’ option and also a ‘no sale, no fee one’.
“The vision is to offer a service to customers that’s equivalent if not better than the high street by using technology, all for a fair fixed fee,” he says, rebuffing the Twitter trolls who say good service cannot be delivered by low fee operators like Yopa.
Online-only estate agents have been around for at least 15 years and offer sellers an online platform to market their homes, but not much else. Hybrids are traditional estate agents who don’t have branches and instead rely on tech, call centres and local ‘experts’ to hand-hold customers.
The final challenge for Yopa is that the early days of investor and city enthusiasm for housing market disruptors has faltered somewhat.
Purplebricks may be doing well in the UK but its Australian and US operations have yet to produce significant volumes, and a few hours after our interview Yopa’s other key rival eMoov revealed that it was looking for fresh financing, and possibly a sale.
Also, four weeks ago Connells pulled the plug on Hatched, the hybrid estate agency it bought in 2015, shutting up shop after concluding that it “did not produce a viable economic result”, said Connells Group chairman David Plumtree.
Ben believes that Hatched’s demise was largely down to its online-only business model, a sector of the market that “has a natural cap on it”, he says.
“There are only a certain number of people in this country who are willing to sell their home just online without hand holding by an estate agent,” he says. “Most of the online-only players in the market have not grown significantly even though some of them have been around for 15 years.”
And as Ben recognises, and both Countrywide and Connells found out the hard way, operating with two competing business models within the same company is ultimately doomed; how can you put your weight behind a hybrid business and ‘think afresh’ when it’s fundamentally at odds with your existing, traditional one?
One observation that Ben makes several times during out time together is that the traditional estate agency shop front or branch will soon largely disappear.
“The portals democratised advertising for estate agents and now, if you’re going to build an estate agency from scratch as Purplebricks has and we are now, you don’t need a shop front,” he says.
The good thing about technology, Ben says, is that it enables hybrids to build the infrastructure to create a national estate agency and scale quickly, leaving the local representatives to process leads and handle sales supported by call centre customers service operations.
But one member of the Yopa team both consumers and the industry won’t be seeing again is Mo Farrah. The Olympian is friendly with one of the founders but his TV ads were a ‘one off’.
Mo Farrah, and the millions of pounds spent on marketing this year are having an effect. Based on the number of properties listed on Rightmove, Yopa has moved up from being the 10th largest estate agency in the UK to being No.8 and expects to be the No.2 by the end of 2019, although this reckoning treats Countrywide’s many brands individually, rather than as one grouping.
“You’d be mad investing in a business which you didn’t believe could get to [the required] volume of scale and I think the opportunity is huge for a national branded estate agency that offers a full service. There’s no reason why you can’t get to significant percentages of the market.”
The question everyone watching the maturing hybrid sector may soon be asking themselves, a bit like my canine companion, is whether they have bitten off more than they can chew.