Purplebricks' founding brothers

'Star investor' Neil Woodford has just bet £7m on online estate agent Purplebricks

LAUNCHPAD: The 'disruptive' estate agent has raised £10m already this year, after launching in April.

by Rachel Savage
Last Updated: 06 Jun 2016

For most newly-launched startups, raking in millions of pounds in investment is but a dream. Estate agent Purplebricks.com only went live in April, but has already raised more than £10m from investors including star fund manager Neil Woodford and former Capita chief executive Paul Pindar.

Woodford has just put in £7m for a 30% stake in the company, which lets buyers, sellers, landlords and renters transact online 24/7, complemented by on-the-ground agents. That comes after Pindar was among investors who put in £3m at the start of this year ahead of its launch.

Brothers Michael and Kenny Bruce, who with fellow founder and tech head David Shepherd still own the majority of the company, spent two years and £1.5m building the business, after selling their traditional estate agent. So far they have so far sold just under 500 properties in the ‘meridian’ region (south east England outside London) and plan to launch nationwide by this time next year, after rolling out in the centre of England next.

‘We felt that there were better ways of offering a service to customers that was much more cost effective, transparent and convenient,’ Bruce told MT. ‘It’s things like fees  - you try and go on any website, of any estate agent on the high street, and you can’t find out.’

More than half of their site’s traffic happens outside normal office hours, he added (although they also list properties on Zoopla and Rightmove), and the company is on track to turn over between £50m-£100m a year in two year’s time.

Woodford ‘felt there was a meeting of minds and very much liked what we were doing’, Bruce said. The investor, whose funds with former firm Invesco Perpetual delivered average annual returns of 13%, was introduced to Purplebricks by Pindar, but isn’t sitting on the board or setting any timeline for an exit or float.

‘Purplebricks represents a highly disruptive business model in the world of estate agency,’ Woodford said in a statement. ‘A business that provides a ‘virtual’ offering without expensive high street offices can significantly undercut the current market.’

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