An analysis by a leading PropTech entrepreneur has attempted to throw light on the startling losses reported last week by online agency easyProperty.
Mike DelPrete, former head of strategy at a New Zealand property portal and classified listings service and now a Proptech consultant, has made a startling analysis of the recent easyProperty figures in his latest posting to Portal Property Watch, specifically by comparing them with figures from Purplebricks.
Firstly DelPrete compares the full year 2016 figures from easyProperty with the Purplebricks figures for the half year of 2016-17. “While the time periods don’t match up, it’s clear to see the disparity between spend and traction” he says.
He says Purplebricks’ revenue was £18.3m for 18,000 listings while easyProperty by contrast has 1,000 listings and £874,000 revenue. Total expenses for Purplebricks were £18.5m making the listings roughly £1,000 each; by contract easyProperty’s total expensive were a little over £12m, making the listings around £12,000 each.
“What’s striking is not how much money easyProperty is spending, but how little return it’s getting for that spend” writes DelPrete, reminding readers that at the launch of easyProperty it was predicted that the agency would list 4,000 to 5,000 properties each month by 2016. “The reality is around 80 properties per month.”
Perhaps most damningly, DelPrete says: “If easyProperty had simply given away 1,000 listings at its list price of £825 each, it would have cost the firm less than 1/10th of what it ended up spending in 2016.”
He also dismisses the suggestion in the trading statement that easyProperty’s technology was more sophisticated than its competitors.
“I fundamentally disagree with the premise that technology is a key differentiator or represents a sustainable competitive advantage in this space. I’ve researched and spoken to dozens of leaders in this field around the world, and I’ve yet to find a correlation between an amazing technology platform and market traction” he says.
Instead, DelPrete unfavourably compares easyProperty’s developers, compared to for example eMoov’s nine, and says: “My sense is that easyProperty just needs to get on with it and stop investing millions in its technology platform.”