EasyProperty has spent millions of pounds to achieve “staggeringly small” revenue and is a lesson in “how not to build a business”.
The analysis comes from international proptech commentator Mike DelPrete, who says that easyProperty has raised just shy of £40m since is inception, making it one of the best funded online agency in the field, second only to Purplebricks.
He says: “What drew me to this story is the sheer amount of money raised and subsequently spent.
“According to its filings, easyProperty had a full year loss of £11.4m in 2016, having lost £6.8m the year before.
“And what did that money buy? A staggeringly small £874,000 in revenue for 2016.
“How did easyProperty manage to spend so much money and achieve such little market traction? It’s a crowded space, but there are a number of other players making significant gains.
“To me, this is a lesson in how not to build a business.”
He goes on: “What’s striking is not how much money easyProperty is spending but how little return it has for that spend.” The company had expected to be listing 4,000 to 5,000 properties each month by 2016, but “the reality is around 80 properties per month”.
DelPrete says that easyProperty is spending £12,000 to gain each listing. In contrast, Purplebricks is spending £1,000.
Furthermore, while Purplebricks is spend around £1 for every £1 in revenue, “easyProperty is spending £14 for every £1 in revenue. That’s an outrageously bad return on investment.”
The full article is on Property Portal Watch here
Separately, Anthony Payne of Lonres yesterday tweeted out a reminder of easyProperty’s ‘funeral march’ stunt through London in September 2015 – the funeral that was meant to be of traditional agents.
Payne pondered: “Reap what you sow. Is a loss of nearly £11m on turnover of less than £800k the death knell for easyProperty?”