Property classifieds and services website The House Shop has already raised more than half of its crowdfunding target as it put its campaign live to the wider public yesterday.
It is looking to give away 4.76% of equity in its business and gives itself a controversial valuation of £10m.
The campaign was first launched privately among pre-selected investors last week and has now raised £254,450 as a 30-day public campaign began yesterday
The site – founded by Nick Marr and Sebastien Goldenberg in 2016 – lets landlords, agents and private sellers list for free and offers extra services such as tenant referencing and property maintenance.
The House Shop’s pitch says it has added 3.3m properties since launch, has more than 20,000 landlords and is the UK’s fourth biggest property website.
It said: “Our ambition is to be the natural choice for every player in the residential property market throughout the UK and beyond.
“Our model is built to complement existing titans like Rightmove and Zoopla, providing a free to use, easy to navigate, secure and trusted choice for everyone.”
Crowdcube users had already queried its valuation though, with one post asking: “Can you please explain, you have placed a £10m valuation on a business that has a turnover of £180,000 in 2017/8 and created a loss of £700,000.
“That is 55x turnover, which seems very optimistic. On forecast 2018/9 revenue of £240,000, that is a 41x turnover multiple, still quite high.”
The House Shop replied: “After consulting with our investors and advisors we decided that a £10m pre-funding valuation was both accurate and fair.
“The figure is based on the size of the addressable market, the potential return on investment, the products already deployed, the website traffic, our search engine optimisation which puts us on first page of Google for more than 4m search terms and the scope of the platform we have already created.”
Meanwhile online agent 99home is into the final nine days of its Crowdcube campaign and is already over its £295,000 target, having raised £348,670 from 175 investors.