The online estate agent backed by Sir Stelios Haji-Iaonnou, the easyJet founder, is to raise nearly £15m from a top City investor in a deal that will take the company’s value through the £100m milestone.
Sky News has learnt that Toscafund, which has made a string of successful investments in innovative consumer-facing companies such as esure, the motor insurer, is investing about £14m in return for a stake of roughly 15% in easyProperty.
The deal, which will provide easyProperty with significant firepower to invest in marketing and expanding its services, is expected to be announced later this week, according to people close to the situation.
It will come at a time of growing consumer demand for and investor interest in the online estate agency sector, with rival Purplebricks last week announcing a stock market flotation valuing it at close to £250m.
Toscafund, which is run by Martin Hughes, a respected City figure, is a big shareholder in companies including Redrow, the housebuilder, and Findel, the home shopping group where it is at loggerheads with Mike Ashley, the Newcastle United owner, over his efforts to secure the appointment of a board director.
EasyProperty was established with the backing of Sir Stelios last year, and was initially seeking £5m to fund its expansion.
However, discussions with Toscafund are understood to have led to a decision to expand the fundraising in order to accelerate its growth.
Toscafund is said to have been attracted to easyProperty’s pure online model, its proprietary technology and the high level of awareness for easy-branded companies.
Mr Hughes’ firm is understood to have secured an option to invest a further £9m in easyProperty at the same valuation at an undisclosed future date.
EasyProperty claims to be the largest online property platform in the UK, with more than 5000 sales and rental listings.
This week, the company plans to launch a service enabling property buyers and sellers to exchange contracts online.
It is majority-owned by its founders and management, with existing investors understood to be contributing about £2m to the latest funding round.
In a statement issued to Sky News last month, a spokeswoman said: “We can confirm easyProperty’s CEO Rob Ellice has been undertaking a planned third round of investment talks in line with commercial plans to fund the continued expansion of the growing online estate agency business.”
Mr Ellice was unavailable for comment on Monday.
According to documents circulated among potential investors and seen by Sky News, easyProperty has an exclusive 20-year agreement with easyGroup which covers any property-related services in the UK.
It also has an option to expand the business into six other European markets, including France, Germany, Greece and Italy, while easyGroup has an option to buy a further 3.4% of the property company’s shares.
“The market is highly fragmented and poorly serviced by the expensive traditional estate agency model,” said a person close to the company.
The fundraising has been led by Chrystal Capital, an advisory firm.