Please note that whilst the campaign is labelled as EIS eligible, the company has its SEIS allowance remaining. We will therefore be looking to seek SEIS relief on the first £150,000 invested into the campaign and EIS relief on the balance. Any tax relief is dependent on personal circumstances and may be subject to change in the future.
Raffle House is a property prize competition website. Think property lottery, open to participants from all over the world. We showcase extremely desirable properties in the price range of £350,000-£650,000 in highly populated UK cities and offer them as prizes to our customers.
Our customers select how many tickets they want to purchase in a particular draw, pay the £5 ticket fee and then answer a multiple choice question. If they answer correctly, they will be entered into the draw and have a chance of winning the property.
We will also offer cash runner-up prizes and donate 5% of our ticket sales revenue to one of three homelessness charities, as chosen by our customers.
Owning a home is out of reach for so many due to high costs and constrained supply making the housing market inaccessible and stagnant.
For many, it is quite simply a dream to own a home.
Raffle House gives those with less prospects of getting onto the property ladder a chance to do so, mortgage and Stamp Duty free.
With only 27% of 20-35 year-olds owning their own home, and half of the London population owning their own home, Raffle House is able to tap into a significant market opportunity.
Furthermore, Raffle House will be able to take advantage of a stagnant property market and can capitalise on vendors' desires to achieve higher selling prices.
In addition, Raffle House will also aim to tackle renting burdens across the country. Over £1,400 a month on average is spent renting in London by individuals. In the future, we plan to launch Rent Raffle competitions that we hope will be organically supported by existing customers that will help alleviate the pains of Generation Rent.
Substantial accomplishments to date
• Having launched on April 19, 2018, Raffle House garnered international press attention and global ticket sales.
• The first test case for Raffle House is using the founder's own property as the prize, with the plan to award this in November, provided enough tickets are sold. We hope to list our second property in early 2019 and have engaged (but not yet signed with) a prospective seller
• As of June 1, we have over 4,000 users signed up and over 2,400 customers.
• We have generated over £30,000 revenue with little advertising.
• Through minimal optimisation, we have achieved a Cost per Acquisition advertising spend on Facebook of around £2. On average each buyer purchases two tickets at £5 each.
• Relative to the number of tickets sold, the Raffle House model sees the average odds of winning a property at about 1 in 175,000, which is about 800x better than winning the Euromillions jackpot. Our model is based on how many tickets we aim to sell versus how many entrants get the answer right - only correct answers are considered in the draw.
• We have developed a model that will allow us to maximise profit while maintaining relatively minimal advertising costs and, following this raise we plan to become self-sufficient and not look to a second round.
Raffle House sells £5 tickets to its prize competition.
Various costs are incorporated into a single ticket, such as bank fees and a 5% charitable donation. Other larger fees, such as the cost of the property and Stamp Duty are covered by the profit-potential revenue that is remaining after the associated fees have been subtracted from the ticket price.
Once Raffle House has sold the minimum number of tickets required to cover the property and Stamp Duty, the ticket price becomes profit less the bank fees and the charitable donation.
Because we know what it costs to acquire a single user and what the property and associated costs are, we can accurately model how many tickets we need to sell to cover those costs and then make profit.
Use of proceeds
The investment we are seeking will be solely used to fund the advertising expense required for the first competition, generating sufficient funds, net of all transactional costs, to enable the business to be financially self-sufficient in the future. The initial primary marketing resource that we will use will be Facebook, though we have plans to expand into other affiliate marketing channels over time.
A typical user buys two tickets, spending £10, whereas the cost per acquisition is about £2. The funds raised will be spent solely on marketing to generate self-sustaining revenue, build a dedicated user base and raise brand awareness.
We have designed Raffle House to be highly scalable through both the frequency and types of its competitions and cities that it serves.
Please note, due to the company's terms and conditions, investors and shareholders in the business are not able to purchase a Raffle House ticket.
Raffle House's market is composed of two normally discrete industries: housing and gambling.
UK Housing Market:
• In 2017, an average of £268.8 billion was spent buying property in the UK.
• £15.5 billion was spent on Stamp Duty Land Tax.
• £5.8 billion on the associated legal fees, valuations, conveyancing and agent fees.
• 27% of 20-35 year-olds do not own their own home.
• 35% of the UK population do not own their own home.
• 50% of Londoners do not own their own home.
UK Lottery Market
• The UK lottery sees an annual spend of £18.7 billion.
• The average British person spends £8 a week or £416 a year on the lottery and related games such as scratch cards.
• 70% of UK adults play the lottery at least once a week.
• According to our model, we believe that Raffle House customers are about 800x more likely to win than a Euromillions player.
• Winning the lottery tends to be considered a curse by many that have won. Owning a home mortgage free, doesn't.
Characteristics of target market
Through optimisation and testing, we found that the optimal demographic to market to are 18-40-year-old men.
This demographic is comprised of 9.6 million individuals in the UK and the age group has a joint population of 19 million.
Raffle House needs to capture just 2% or 1% respectively in order to hit its sales target for any given competition.
Raffle House already has an active marketing strategy, with paid Facebook and Instagram adverts resulting in a Cost per Acquisition of about £2 per customer.
Supported by a high-end media agency, Facebook will be the primary paid advertising platform. However, in time we will move into other affiliate marketing channels and platforms.
Property prize competitions are a relatively new industry in the UK, with a notable first well-publicised case in 2009. However, they have only recently become more mainstream.
At the moment, Raffle House identifies three main competitors. Their models are all slightly different with a combination of free-play, different ticket costs, less desirable property in the same property price bracket or mansions/huge cash prizes in higher price brackets and higher ticket sales requirements.
We have designed Raffle House to overcome the shortcomings of our competitors and improve upon their successes. To our knowledge, no single property prize competition company has awarded a property as a prize. Therefore, we intend for Raffle House to be the first in UK history.