It has emerged that Harry Hill, legendary founder of Countrywide, is no longer on the board of easyProperty.
Hill, originally named as the online agent’s chairman, said last night that he resigned shortly before the official launch in September.
However, both Hill and easyProperty founder Robert Ellice stressed to Eye that there has been no falling-out of any kind and that they remain on amicable terms.
Ellice said: “There is no animosity whatever between us – indeed, I had a glass of wine with him a couple of nights ago.
“It was a decision that Harry made, but we are still working together on my Clarke Hillyer business.”
Hill told Eye: “I have indeed resigned from the board of easyProperty, two or three months ago.
“The reason for my resignation was that I vehemently disagreed with the valuation applied to the company in advance of the second funding round and feared that a very public failure would severely damage the company’s excellent prospects of success and embarrass the directors.
“In the event, the company’s advisers, Crystal Capital, were absolutely right, I was totally wrong, and the funding round was an overwhelming success and over-subscribed by both institutional and private investors.
“I felt therefore that the honourable thing for me to do was to tender my resignation, which was accepted, I think with regret.
“I remain good friends with Robert Ellice and continue to sit on the board of his commercial property agency in east London.”
At launch, easyProperty was valued at £66m.
Hill went on: “Personally, I believe that at least one of the several disruptive agency models now emerging will succeed in the next five years and attract a reasonable percentage of market share.
“Easy’s business model, strong branding, significant capital and talented multi business skill management team gives them an excellent opportunity to succeed, and I wish them well.”
Ellice told Eye that the business is going very well: “Certainly, we will hit 1,000 properties within the next day or so,” he said.
“We will also be making an announcement shortly which will show that we are moving things forward and expanding more quickly than we had anticipated.”
Ellice stressed that Chris Welch remains in situ at easyProperty in his marketing role.
The firm is currently dealing in lettings only, but next year will move into sales.
Obviously and understandably no detail of Mr. Hill's valuation have been provided but one has to suspect his stance was that Easyproperty was not worth £66 million based on the trading and potential of the business at the time.
I am going to stick my neck out a bit here, if my old Nan won Euromillions and asked whether Easyproperty was the place to invest a few quid as a new and emerging business model in an industry I know, I think I would be pointing out that Estate Agency is a service industry and any valuation has to be based on the sustainability of the business model, the reputation of those involved and the levels of competition fighting for the same space. On that basis I would suggest investing in Easyproperty is the same sort of punt as buying a Euromillions ticket.
A few people made cash out of Dot com and this whole Online Agency fad is an attempt to engineer a few million for those smart enough to get in and out at the top. The foot soldiers that make the business model work are having a torrid time competing locally with Agents who have reputation, presence and credibility.
I am fairly certain time will prove Mr Hill correct ( assuming he wasn't suggesting a figure higher than £66 million) Personally from the evidence presented on here I would be struggling to see 1% of that.
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You're quite right Benay and I would say if you read between the lines, the comments on this site the other day, were pretty much on the money. Didn't think it was worth the money translates into unsustainable business model in my mind. The one thing I always find really interesting is that so far all we have is how many properties all of these companies have, but that in itself means nothing its about what money they've made. Well its easy enough (if you pardon the pun) to have a stab at what easy have made 1000 properties x average fee of £30….giving them a huge benefit of the doubt that most hadn't just opted for the free listing. So £30,000 is all they've made since their launch and a valuation of £66M. Not the best return for investors is it really. I would say Harry made a very wise decision.
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£30,000 trading in 6 months based on rule of thumb estimates- £12,000 profit for the year (it won't be profit but give them benefit of the doubt) that suggests a valuation in the ball park of a single board members salary.
As the King came by the little boy looked and, horrified, said:
"Look at the King! Look at the the King! Look at the King, the King, the King!
The King is in the altogether, but altogether, the altogether
He's altogether as naked as the day that he was born
The King is in the altogether, but altogether, the altogether
It's altogether the very least the King has ever worn"
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A valuation based on branding and access to unsophisticated investors via crowd funding. I am quite sure his valuation concerns were entirely correct. Not a great start for any business in my view.
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So reading between the lines, Hill jumped ship prior to launch and was told to keep it hush until the end of the year, possibly the only sensible decision made by this firm to date. Anyone who believes this company is worth anywhere near £66m needs to see a shrink pretty dam quick.
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Crowd funding is a punt. Investing a couple of grand is worth a shot, but to scale the investments up to a business value isn't really accurate. This is why we are happy to pay a couple of quid for a Euromillions ticket – the odds may not be great, but £2 is worth a flutter. Lots of people would risk a small investment on the chance of a return, but would anyone pay the full yet notional £67m at this stage? I had a friend who invested £1000 in Google years ago. It had no value at the time and the capitalization insane – but it doesn't look insane now and he is a very happy boy. In EP's pitch, they said they had lots of landlords who had registered with over 12,000 properties between they. They expressly did not claim that they had 12,000 properties pre-listed, (as Robert informed me – I had misread the pitch) but many may have taken this as implied and a small punt would seem very attractive. A big punt would have lead to due diligence. The fact is, there is world of difference between crowd funding and listing on the stock market. One is a gamble, the other an investment on a known market cap with a trading history. EP has deep pockets and the litmus test will be when they launch it to the public which, in fairness, they haven't done to any notable degree as yet. There is however, in my opinion, one flaw in their business model which may affect their success, especially in lettings hotspots with efficient high street agents. Time will tell.
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In my personal opinion Easyproperty has not been devised as an answer to "Estate Agency for less than £100" but as a way of making money from investors. It is interesting that their spokesman on this site(Chris) was saying pre launch that 10's of thousands of landlords had instructed them (when actually they may have expressed an interest) . They are now approaching 1000 listings which in any event can't be on the targets that they set themselves? Unless they sort out their property presentation, they are doomed in my personal view
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I am not investing in them, however what would they be worth if they took 40% of the on-line market, and 50% of all sales and tenant find are with on-line agents in 5 years time? (Both very possible outcomes!!!)
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Care to explain how that is possible???? Even if it did happen the business would be worth about £37.8 million; That is a long way short of £66 million.
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But they won't be, do you genuinely believe that 50% of the housing market will want to sell their own home?! No actual estate agent would ever believe that because it is only the techy's that think that all there is to it is advertising on a website, everyone else KNOWS the work that goes into getting someone moved. Not one of the new firms has yet been through 12 months trading or published results and those that were around before instead of seeing their markets expanding, have simply seen their market shared eroded. So its very possible to say something is a "very possible outcome" but your theory is no more "possible" than the fact that when the customers see that their chance of selling and their guarantee of even a remotely accurate valuation on their properties that these firms will disappear just as quickly as they appeared!
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Virgin – great at airlines and very little else…….
the ego brands very rarely work across all genres and you only hear about the success not the huge failures.
don't want an easy rental car, dont want an easy cafe and not sure there is a place for easyproperty……
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How prophetic and informed many of these comments were. Pity the shareholders at the time didn’t read or take note of them.
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