Hybrid fixed-fee lettings agency Howsy says it will reach break-even within two years, some nine years after it was founded.
The claim is made within its pitch document to investors on crowd funding platform Seedrs, who are being asked for some £800,000 to help fund the company. It has raised £610,000 so far with 20 days left to go.
This, the company says, will be its final fund raise.
It has 7,000 properties under management and CEO Calum Brannan says his company wants to make renting a property as easy as booking a hotel stay.
This is the third time that Howsy has crowdfunded on Seedrs, raising £2.35 million in June last year and £700,000 in 2018 to fund its tech platform and the purchase of several competing businesses including The Happy Tenant Company and Upad.
But despite increasing its gross margin by 30% and growing revenue by 134% during the pandemic, Brannan says the company still has two years to run until it breaks even.
This will be achieved by selling additional services to renters and landlords including insurance, utilities and furniture rentals, which are vastly more profitable than the thin or no-existent margins of its property management arm.
“Landlords use us because we offer a completely different experience to the high street by both saving them money and enabling them to manage everything online.”
Brannan says the company’s average annual rental income from a property is now £972, up from £660 two years ago.
Howsy says it is raising this funding as a bridging round to provide ‘runway’ to Series A, which it aims to complete by January 2022.
This is the name typically given to a company’s first significant round of venture capital financing and is when a firm like Howsy is judged to have survived the precarious early start-up financing years.