Speculation is growing about the future of online agency Yopa.
This follows a key resignation from Yopa’s board and one expert’s analysis that new funding may only be enough to help it survive for a matter of months.
Yesterday Yopa revealed it had secured some £16m in new funding from some of its earlier investors - the Daily Mail in the form of dmg ventures, Savills in the form of Grosvenor Hill Ventures, and some of the agency’s founders.
However, former Emoov chief executive Russell Quirk said on Twitter that while he congratulated the firm on its latest investment, he thought it likely that Yopa actually wanted some £75m in additional funding.
“They’ve raised nothing like they need to, and no one outside the business was willing to invest” he wrote.
And when asked how long this £16m might buy the agency, Quirk responded: “At their previous burn [rate] just five months. However they’ve scaled back their market spend so on the one hand a bit longer; but the problem will be that lower marketing spend equals lower revenue.”
One notable absentee from the list of latest investors is LSL Property Services - this High Street agency group was an initial funder of Yopa but has spectacularly written down this investment twice so far this year. One write down was by 61 per cent.
In March LSL revealed in a trading statement: “LSL has a 14.7 per cent minority shareholding in Yopa. LSL's previous carrying value of £20m for Yopa has been written down through reserves by £12.2m to £7.8m as at 31 December 2018 to reflect the Board's assessment of fair value.”
Meanwhile this morning it’s been revealed that Ian Crabb, LSL chief executive, has stepped down from Yopa’s board without any explanation.
Yesterday Anthony Codling - the former Jefferies analyst whose critique of Purplebricks’ sales record last year appears to have marked a turning point for online agencies in general - tweeted: “Investors usually allocate capital (invest) where they think they will get the highest return. Interesting therefore that LSL has (once again) chosen not to join in Yopa’s latest £16m funding round. Does this imply LSL thinks high street trumps hybrid?”
And he continued on social media by saying yesterday: “Yopa’s no sale no fee package starts at £1,999 which is more than 2x that of its fixed fee packages which start at £899 (you pay these fixed fees whether a sale is made or not). Does this imply that Yopa sells less than 50 per cent of the homes it lists on the portals?”
Other senior industry figures were just as sceptical.
Buying agent and market commentator Henry Pryor tweeted the news of Yopa’s new funding round - and the new marketing initiatives of another onliner, Housesimple - accompanying the message with an animated GIF showing money being shovelled into a furnace.
In May this year Yopa admitted that it had cut 16 jobs including that of national sales director as a result of a restructuring.
But it insists that yesterday’s announcement about the £16m was good news.
A spokesman told Estate Agent Today: “In terms of the level of investment we were seeking for this round – we sought £16m and the offer was fully subscribed from existing investors, negating the need to look outside. LSL Property Services has its own business to focus on and its own capital allocation decisions to make, but remains a supportive shareholder.”
And in relation to the suggestion that it sold only around 50 per cent of properties it listed, the agency told EAT: “We don’t disclose commercially sensitive information like that, but believe we perform strongly in this respect.”
LSL Property Services told EAT, in terms similar to those from Yopa: “LSL has a range of investments and has chosen to allocate capital in accordance with its stated strategies. Whilst LSL decided not to invest in this funding round it has retained a shareholding in Yopa and continues to be a supportive shareholder.”