Howsy makes renting better. For everyone. We are building the #1 serviced marketplace for renting.
- Award winning startup, the UK's "Best Online Business 2020"
- 7,000+ properties on the marketplace (managed and tenant find)
- 134% YoY revenue growth & 30% increase in gross margins*
- Huge potential market of 5 million properties
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Howsy is building property management from the ground up with technology at its core and an innovative and infinitely scalable business model.
Nobody associates the rental market with change or innovation. The UK’s 5 million private rental properties are generally serviced by high street agents or landlords do it themselves via low-cost online tenant find services.
Now there is an alternative. Howsy has challenged the traditional over-priced & under-serviced lettings model. A few short interactions with Howsy is all it takes to arrange a viewing, make an offer on a property or organise a repair and we expect to continue to remove reliance on traditionally people heavy processes over time.
We have created a digital ecosystem that removes traditional agents, bringing down the cost of managing a property by an estimated 75% & delivering great customer service.
Substantial accomplishments to date
1,700%* growth since our Seedrs debut
• Since our first crowdfunding in 2017, we've seen revenues rocket by over 1,700%*, including growth as a result of the acquisition of The Happy Tenant Company and Upad in Sept 2020 and Dec 2019. We now pretty much cover every major town & city in mainland England.
We have 7,000 properties on our platform mixed between recurring revenue and one-off customers.
An award-winning platform
• Howsy graduated from winning "Best Online Agent" in 2019 to "Best National Agent" in 2020. Stepping out of a niche category into the mainstream.
Experienced team, built for scale
• We have assembled contributors and a world-class team coming from companies like Easyjet, AxelSpringer, PayPal, Propertyfinder, Microsoft, and Endsleigh. Howsy's team of 81 operates across three locations in the UK and SE Asia. We also work in partnership with self-employed viewing and inventory clerks.
Strong revenue growth amid a global crisis
• Even during an unprecedented crisis, 2020 saw our strongest year since incorporation.
• We've now scaled our marketing channels and developed a proven customer acquisition strategy
• We’ve achieved a 130% year-on-year revenue growth* which comprises a balance from both organic growth and acquisitions of Happy Tenant Company and Upad.
Aggressive acquisition strategy to support growth & competitive moats
• Howsy has acquired two of the largest online agents in the UK, Upad and Happy Tenant Company in December 2019 and September 2020. This has substantially increased deal flow for our fully managed proposition & has unlocked one of the largest landlord databases in the UK.
• We made a final acquisition of "The Happy Tenant Company" in September 2020.
• We are humbled to have had a positive response from the press, featured in Forbes, The Guardian, in TechCityNews, and Startups.co.uk amongst others.
*Based on unaudited management accounts.
Since 2019 our average property income has increased from £660 to £972 per year.
Howsy generates revenue from charging a fixed fee from £59 per month outside London right through to £168 per month in London with additional insurance services provided.
We also generate up to £1,000 per managed property by finding tenants, conducting viewings and taking photos. These additional services are delivered by our on-the-ground Howsy Hosts or trusted suppliers.
Use of proceeds
Howsy is raising this funding as a bridging round to provide runway to Series A, which the company aims to complete by January 2022. 100% of funds will be used for working capital allocation across marketing, general/admin, and technology.
The Company has the following debt in place:
1. A secured £3.1m debt facility with The Prism Income Sp LTD, of which £1.745 has been drawn down and is outstanding. This carries an interest of 15% per annum. This loan also has a 1% administration fee payable every 6 months on any outstanding loan amount.
These funds are to be repaid in installments starting from June 2021 until April 2022. Any future equity fundraising (i.e. not including this ASA and previous Future Fund convertible loan investment) will need to be first applied to repayment of the loan to the extent there is any amount outstanding.
An existing shareholder, Skybound Capital, is the related party of Prism Income Sp LTD
2. An outstanding Convertible Loan of £2,346,350 from the Future Fund and Co-investors (including Seedrs investors). This loan accrues interest at 15% per annum. Other terms are as per the standard Future Fund convertible which can be found here: https://www.uk-futurefund.co.uk/s/
3. £50,000 Bounce Back loan at an interest rate of 2.5% per annum. The loan is to be repaid over the course of 6 years, and repayments will start in May 2021.
Funds raised from this ASA and the previous Future Fund CLN will not be used to repay these loans.
Advance Subscription Agreement Terms
This investment round is being raised by way of a convertible equity investment structure, in this case, an 'Advanced Subscription Agreement'.
The key terms that apply to the Company’s advanced subscription agreement are set out below. See also attached Key Terms document for further details.
Discount – 20%
Valuation Cap - £20 million
Floor Price - £4.63 per share (valuation of £13,682.131). If the Equity Fundraise triggering conversion is at a valuation equal to or below the floor price, the discount will not apply and ASA investors will convert at the same price as the Equity Fundraise.
Default Share Price - £5.95 per share (valuation of £17,582,868)
Conversion is triggered by:
(1) An Equity Fundraise – defined as the Company raising investment capital of at least £1,000,000 from one transaction or a series of transactions
(2) A Change of Control of the company (transfer of more than 50% of the share capital) or IPO
(3) Longstop Date: 6 months from the date of the Advance Subscription Agreement.
(4) Winding up event.
On conversion upon an Equity Fundraise, Change of Control or IPO (a “Trigger Event”), the convertible will convert into ordinary shares at the lower of:
(1) the lowest price paid per share in connection with the Trigger Event, discounted by the Discount (unless shares are issued in an Equity Fundraise at or below the Floor Price, in which case the Discount will not apply); and
(2) the share price based on the Valuation Cap divided by all issued shares and outstanding options in the Company.
On conversion at the Longstop Date or on a winding-up event, the convertible will convert into ordinary shares at the lower of (i) the lowest price of any share issued after the date of the convertible and (ii) the Default Share Price of £5.95.
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