Hybrid lettings agency Howsy has raised an additional £2.29 million in funding via the Seedrs crowdfunding platform after asking for just £250,000.
This includes £1.14 million from the government’s Coronavirus Future Fund which offers matched backing for start-ups that are either pre-revenue or pre-profit and which are not eligible to receive support cash from other schemes, in return for equity in the companies involved.
But even with the taxpayer funds, Howsy has still been over-funded by £900,000 on top of its initial funding target, raising £1.15 million. This in turn has been doubled by the Future Fund cash.
So far 573 people have invested in Howsy’s latest Seedrs campaign, most chipping in a few thousand pounds each plus a single, anonymous investor who stumped up £250,000.
The cash raised is clear proof that investors believe that online lettings agency platforms like Howsy will grab a sizeable chunk of the private rental market.
In its pitch document Howsy claims to have 7,000 properties listed within its ‘marketplace’ and 81 staff, and in the past the company says some 60,000 landlords and tenants have used its service.
The firm’s CEO Callum Brannan (left) says the new cash is part of a planned larger investment round in 2020, but in the short-term the funds will be used for working capital and growth marketing.
His company claims to be challenging the traditional ‘over-priced and under-serviced’ lettings model by offering landlords an online tenant find and tenancy/property management service, the latter being backed by a central team of telephone-based staff.
Howsy generates revenue from charging a fixed fee of £39 per month outside London to £115 per month in London, but also claims to generate £1,000 per managed property by finding tenants, conducting viewings and taking photos.
This latest raise follows a £5 million raise last year from institutional investors through more traditional channels.
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