A leading digital analyst says online agency Yopa has doubled its listings this year and is fighting the merged Emoov-Tepilo operation to be number two to Purplebricks.
“One can imagine that the business is spending big to acquire new customers, so it is unlikely to be sustainable or profitable. But it is growth nonetheless” according to Mike DelPrete, the former head of strategy at New Zealand property portal Trade Me and now a respected international real estate consultant.
He is the second PropTech expert to set out the high spending pattern of Yopa.
Eddie Holmes, chair of the UK PropTech Association, last month suggested that Yopa - which has substantial financial backing from Savills and LSL Property Services - has had around £55m of investment, which is more than Emoov and Tepilo with a combined £31m.
In terms of the wider UK online estate agency landscape, DelPrete says Yopa is therefore vying with the newly merged Emoov-Tepilo operation to be the ‘runner up’ for business, behind Purplebricks.
“The #2 spot behind Purplebricks is very much up for grabs. The combined Emoov+Tepilo entity is neck-and-neck with Yopa (in terms of new listings per month). Yopa is seeing sustained, strong growth, nearly doubling its business since January” says DelPrete in an update to PropTech enthusiasts.
But DelPrete insists that Purplebricks is still the undisputed leader “with 5.9 times the new listings of Yopa and 7.6 times the new listings of Emoov+Tepilo for the month of May.”
He also says that the total market share of the top five online agencies, based on new listings, is down to 5.4 per cent for May.
“Post-merger, I would expect increased activity from Emoov+Tepilo that grows overall market share” says DelPrete, who says he expects further consolidation between onliners - simply because most adopt a model that is losing money.
“The math is simple; the model doesn't work at low volumes” cautions DelPrete, who goes on to make some interesting points about these players.
“When considering the relative traction of Purplebricks vs. Yopa, Emoov, and Tepilo, keep in mind that all of the Purplebricks customers are committing to paying upfront; Yopa and the others offer options to defer payment until after a successful sale. In that sense, it's less surprising that Yopa is seeing such strong growth [as there is] no risk for new customers” he says.
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But there is a risk for new customers. If their properties sit on the market for an extended period, due to the passive nature of the online agencies, the amount they achieve will be significantly impacted.
It's all well and good "saving" a few thousand on fees, but if you then only achieve 95% of asking price because the sale has been handled badly, you're most definitely out of pocket.
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