Online firm wins £750k crowdfunding as it defies 'curse of Emoov'

Crowdfunding has been largely avoided by property companies for much of the past year following controversies surrounding Emoov’s fund raising - but now flat-sharing website ideal flatmate is dipping its toe in the water.

It has invited potential investors to pre-register with the crowdfund platform Seedrs and it claims this has already produced pledges of over £750,000.

The publicity material from the PropTech service says a crowdfunding campaign - which launches in earnest next month - allows investors to “join our mission to revolutionise the way people find flatmates.”

The service uses an algorithm to match apparently-compatible flatmates, who can clearly achieve financial economies of scale by  renting jointly. It also has a platform for online payments, references and tenancy agreements.

Crowdfunding has historically been a popular way of raising money for innovative agencies and start-ups but there was controversy surrounding the Emoov agency, which under its previous ownership raised approaching £2m on another crowdfund platform, Crowdcube, over the summer of 2018. 

However, Estate Agent Today revealed in December that Emoov revised its own valuation from £104m to £51.8m at the end of that crowdfunding exercise on Crowdcube. This was an entirely legal tactic - undertaken within the cooling-off period when investors can review their investment and change their mind if they wish.

But then Emoov went into adminstration some months later and this provoked fierce debate over whether investors had a realistic picture of the online agency’s true position.

Then over last Christmas the online lettings and sales service TheHouseShop scrapped its £500,000 crowdfunding pitch and blamed it on the collapse of online agency Emoov.

TheHouseShop put a pitch on Crowdcube at the end of last year; prior to it being opened to all investors it raised some £250,000 from early private investors, suggesting that the public fundraising would be successful.

But then a 30-day public campaign was withdrawn after a relatively poor performance with one analyst saying it was "the curse of Emoov" that scuppered the attempt. 

Very few agency industry companies have attempted any crowdfunding since the Emoov row, although this route had been heavily used by property-related start ups in the past.