The Six Wives of PropTech
Once upon a time, in a land far, far away, there were 6 PropTech founders. Those Founders all had an audacious dream – to revolutionise the residential estate agency market once and for all. Many followed those six leaders, supporting them with money, in-kind services and, above all, faith. But just like Henry VIII’s six wives, the attrition rate has been phenomenal.
The evolution of this market, and the fates of the Founders, offers a helpful insight into likely outcomes in similar sub-sectors of PropTech where there are multiple businesses all competing for the same prize and, potentially, cannibalising each other in the process.
Some of you may remember this helpful rhyme from your GCSE (or ‘O’ Levels for those of you who are slightly longer in the tooth) history class:
“Divorced, beheaded, died, divorced, beheaded, survived.”
Let’s look at the six wives of residential PropTech.
Adam Day, Hatched
Nominally acquired by residential corporate Connells, Hatched had failed to generate significant traction. Not long after the transaction, Day was forced out and replaced by a new CEO. Day now earns a living as Head of Operations at easyProperty. Speaking of which:
Rob Ellice, easyProperty
Ellice took the plunge and purchased a rights agreement to use the ‘easy’ brand for residential property. Three years later, and with little traction, the business was wrapped up in a ‘merger’ with the Guild of Professional Agents. You can read our thoughts on that shotgun marriage here. Ellice was retained as Commercial Director although his current whereabouts are unknown.
Sarah Beeny, Tepilo
Television star Beeny was an early entrant into the online estate agency industry but recently has seen her company effectively taken over by Northern & Shell, the publishing and media group who took an initial advertising-for-equity stake in the business. Now removed as a Director, but fronting a last-chance-saloon TV ad campaign for the brand, it seems that Beeny will have to be satisfied with her TV fortune instead.
Graham Locke, House Network
Resigning as a Director of the company in November 2016, allegedly due to differences with major shareholders, Locke now finds himself as poacher-turned-gamekeeper at PSG. Much like House Simple, House Network achieved reasonable traction but Locke will not be the person taking the business forward.
Alex Gosling, House Simple
Although Gosling achieved some reasonable traction with his House Simple business, by the time it achieved any real scale Gosling was not considered the man who could continue to take the business forward. He was thus moved to a ‘President’ role to make way for a new CEO with no digital experience.
Russell Quirk, Emoov
Still in post as CEO and now backed with what appears to be a healthy war chest and experienced management team, Quirk has outlasted the rest of his peer group and Emoov remains the only business with any likelihood of reaching sustainability and achieving a meaningful exit. Quirk certainly appears to be the equivalent of Catherine Parr.
Although somewhat tongue in cheek, this analysis poses serious questions to other PropTech Founders who may find themselves in a similar dynamic with their particular sub-sector. None of these businesses or Founders mentioned above ever collaborated with each other, let alone merged with or acquired each other, and now only one remains in post and following their original dream.
Will we see the same outcome in those sub-sectors or will these lessons be heeded?
PS: YOPA and Purplebricks are intentionally not covered in the article. That should give you some idea of our views of the motivations behind those two IPO vehicles.