Strike ‘interested’ in Purplebricks takeover...

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15 March 2023

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By Marc Shoffman

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Strike ‘interested’ in Purplebricks takeover

Online agency brand Strike is believed to be considering a bid for beleaguered rival Purplebricks.

A source close to the talks has suggested Strike is interested in combining the Purplebricks brand with its own fee-free model but is being stifled by the bidding process.

Estate Agent Today understands that investors have been lined up to back a deal but a non disclosure agreement (NDA) required as part of the takeover process would stop Strike from speaking with the backers.

This process is stifling any chance of talks progressing despite investor interest, it is understood.

An NDA has not been signed but there is concern about the value of the Purplebricks' business the longer the process of takes.

Its share price closed at a new low of 6.9p yesterday.

Purplebricks put itself up for sale in February and previously said it has received “several credible expressions of interest.”

A spokesperson for Strike and Purplebricks declined to comment.

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- Local Agent
- 15 March 2023 07:58 AM
Good lord, no. On the surface, strike seems to be amazing, faultless, a no-brainer but in practice its poor customer service (there is none), inexperienced Estate Agents and team all round (causing countless over valuations) and shoddy marketing will further give the belief that real, proper, experienced and knowledgeable Estate Agents aren't needed.

My goodness, how wrong would the public be to buy into that. When it would cost them not just financially but emotionally and in high levels of stress and anxiety; they'll regret it, but it could be too late.

Ergo...I'd rather have PB sell my house (laughable I know) than Strike.
janet byers

15 March 2023 08:29 AM
There are plenty of high street agents who have young inexperienced staff no customer service and over value.
They use Rightmove which is all the marketing a high street agent uses
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- Micky Bricks
- 15 March 2023 09:07 AM
Janet, I think you're a bit behind the times, granted so is the average high street agent.

strike and purplebricks together? two birds with one stone comes to mind.

- Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders
- 15 March 2023 10:49 AM
Purplebricks made a loss of 32M under its new CEO, and had around 40M of cash left, but it only listed 40,141 properties, down from 58,000 the year before. At its peak it was listing around 80,000 properties - can you see the picture?

Also Strike - has in its 12 years of trading managed to make a loss of £43.2M, get the picture here also, obviously Strike is burning cash at a rate of 3.6M a year, or £300,00 a month, certainly not a company I would ever invest in. So why would any investor back Strike which has a model that eats cash, to buy the assets of Purplebricks which never mades a profit, and clearly is losing 30% of its market share each year.

I guess the pitch deck for Strike would be - we used to be called Housesimple, we changed the name to Strike and changed the model so the public could get a free sale, relying on other services as the upsell to make profit, unfortunately this model has not passed the sniff test with the general public. Recently we cut back our sales force due to costs. So we need £10M to continue feeding Strike's immediate losses, plus multi-millions to cover the losses that Purplebricks makes every year, well Mr Investor are you in?

We want to call the new company 'Strike's Purplebricks Vanity Project' and regarding forward forcasts as to your return on capital, well Purplebricks is trading on the AIM at 6p, we aim to get that to zero as soon as we can.

Given the recent ripples from the Silicon Valley Bank debacle, I am not sure any investor will want to take a punt on the pushing together of two loss making businesses, which clearly are not powered by the right technology.

Maybe investors would be better off paying £40M to someone who understands the real estate ecosystem, and starts with the needs and wants of the consumer and builds the UX from there, rather than a cardboard model of what agents do - with significant parts missing.