Online letting agency Howsy is in the process of being sold to a major estate agency in an ‘accelerated sale’ after the business was unable to attract new investment.
Howsy, which originally launched in 2016 as No Agent as a fixed-fee management service but rebranded in 2018, has attracted millions of pounds in both institutional shareholder cash and crowdfunding.
This includes £800,000 from investors in March last year, which the company said at the time would help get it through to profitability in two years, ahead of a larger investment round in 2022.
Howsy looked to be one of the few online-only lettings agencies to crack the digital nut of offering a fixed-price remote property and tenancy management service provided by a central team, accumulating some 7,000 properties under management both organically but also via acquisitions.
This included, most notably, the purchase of Upad out administration in January 2020.
In a letter to shareholders sent yesterday, founder and CEO Calum Brennan has thanked them for their ‘support and belief in our mission’.
“But I am writing to you today to inform you that Howsy, its directors and its majority shareholders have agreed for the group to be acquired by a leading estate agency chain,” he says.
“This has not been an easy process or decision, but the Board believes that this acquisition is in the best interest of the business as a whole.
“This acquisition became the number one route for the board to pursue due to the speed at which the buyer could move. This was necessitated by the current cash position of the company and the fact that we had been supported during the last six months by way of shareholder loans, neither of which was sustainable.”
Brannan reveals that Howsy will continue as a going concern under its new owner with all employees retained and that the purchase will be confirmed within two weeks.
Shareholders, from small crowdfunders to large institutional investors, will be the main losers in the deal, which will see them receive ‘at most’ 30p per share.
Industry commentator and letting agent Asaf Nadot, founder of HomeMade, says: “We are very sorry to hear the news. Howsy tried to make a difference in an industry requiring a modern approach for customers. Our thoughts are with the customers and staff affected by it and we’re here to support anyone impacted by the latest news.”