A hybrid/online estate agent providing a "tech & touch" approach to buying, letting, selling or renting.
- Launch of website and consumer dashboard in January 2020
- Appointment of first licensees in April 2020
- Building a portfolio of 200 properties for sale 2020
- Investment conditional upon Future Fund funding - see Key Info
Learn more about convertible loan campaigns.
Overall house sales were 38% higher in 2020 than in 2019 and forecast to continue in to the start of 2021. In 2020 house prices rose by in excess of 6%, the highest rise for 6 years. There are currently 650,000 transactions in progress, the highest number since 2004.
The business is an online/hybrid estate agent using a combination of technology and human intervention to provide a 24/7 service to consumers for the sale, letting, renting or buying a home any where in the UK. We have a 50 year exclusive worldwide licence to use the easyProperty brand which forms part of the easy family of brands owned by easyGroup of which easyJet forms part.
Our model licences entrepreneurs with or without estate agency experience to set up their own businesses under our umbrella brand in exclusive post code areas around the UK. We provide full training and ongoing support and access to the property portals such as Rightmove & Zoopla, a dedicated website, a consumer dashboard, a CRM system that enables prospecting and nurturing of prospective sellers and landlords, social media pages and access to mortgage lenders and conveyancing firms.
Substantial accomplishments to date
31st July 2019 - acquired the easyProperty brand and 50 year exclusive worlwide licence to use the easyProperty brand.
August - December 2019 - rebuilt the website, integrated a consumer dashboard and built a CRM system
December 2019 - 7 active territories
January 2020 - launch of new website, dashboard and pricing model
July 2020 - 16 active territories generating listings and sales
October 2020 - 34 active territories
December 2020: 50 active territories
December 2020: 226 properties listed; 118 for sale and 108 under offer.
December 2020: rated 4.8 on Trust Pilot from 763 reviews
1. Licensees pay £175.00 per month per territory
2. Licensees pay 30% of all listing fees to the licensor.
3. Consumers have a choice of fee options:
a) An upfront fee of: £795.00
b) An upfront fee of: £395 and a completion fee of £895.00
c) A commision of 1% on completion
d) Average fee: circa £1200 - £1500 depending on fee structure.
4. Referral fees from mortgage lenders and conveyancers
5. Upselling additional packages such as accompanied viewings, enhanced marketing and EPCs.
6. Develop corporate relationships with asset managers, new homes builders and build to rent companies offering our services on a national scale
The licensor processes all sales and collects the fees centrally for distribution to the licensees.
Use of proceeds
The proceeds will be used for development of the tech platform (35%) and on marketing (65%), which will include payment of brand royalties and licence fees to Easygroup Ltd, an existing shareholder in the company.
We intend to develop our tech platform to allow all stakeholders (including buyers, sellers, conveyancers, mortgage lenders, surveyors and valuers) to interact in one place to upload and sign documents, pay fees and deposits and monitor the progress of each transaction which we believe will:
a. Speed up the transaction process
b. Reduce costs, both real and abortive
c. Leverage fees from third party suppliers
d. Attract more consumers & increase market share
e. Attract more licensees to grow and generate our revenue stream
Please note, the company has the following debts outstanding:
1) A bounceback loan of £50,000. This loan is interest free for 12 months, and was taken out on the 7th of May 2020. Following this period, interest accrues at 2.5%. The term of the loan is for 6 years, with repayment starting after the first 12 months.
2) Supplier debt of £68,000 owed to EasyGroup Limited in relation to royalty and licences fees and £12,000 owed to eProp Limited in relation to the acquisition of the easyProperty business. Both parties are existing shareholders of the company and these debts will be repaid when cash flow allows.
In anticipation of the proceeds from this capital raise, which is expected by the end of February, the company is managing a limited cash runway. Should further funding be required in the short term until receipt of funds, the management team is confident in its ability to fund the business themselves and from existing shareholders. If this is required, the funds will be provided in the form of a convertible loan on the same term as the Future Fund.
The target fundraise of £800,000 is expected to give the company at least 12 months runway
Convertible Loan Note
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu....
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
1. Key terms
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart....
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
Redemption Premium: An amount equal to 100% of the principal loan amount.
Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount.
Maturity Date: 36 months from signing convertible loan agreement.
The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
If redeemed, the company will repay the principal together with the Redemption Premium.
If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
2. Government matched funding
The company intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. Subject to eligibility criteria and the Future Fund's approval, the Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’ to eligible and approved businesses, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is conditional upon receiving matched funding from the Future Fund. Seedrs will not complete the investment and transfer the funds raised until we have confirmation that the Future Fund matched funding application has been approved and that the Future Fund is ready to make the investment. If the application is denied, the campaign will be cancelled and funds will be returned to investors.
Because this campaign is conditional upon the matched funding, you will see that we have reflected the Future Fund investment as part of the round. It is distinguished in pink in the progress bar of the campaign. This is to give investors an indication of the potential total size of the funding round (and potential dilution on conversion), but to also distinguish it from regular investment through the Seedrs platform.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
3. Conversion to equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
5. Secondary market
Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).
6. EIS Relief - past, current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.
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