The Negotiator The essential site for residential agents
As we reported this week German media giant and major Purplebricks shareholder Axel Springer has invested £5 million in hybrid estate agency-cum-home-buyer Nested.
Founded in 2016, the agency has operated the longest-running attempt to introduce US-style ‘iBuying’ into the UK and in 2018 raised £20 million to finance its unusual model, initially marketed itself as an estate agent that fixed ‘broken chains’ by purchasing properties directly off vendors.
But Nested has changed tack significantly – previously it guaranteed to buy a vendor’s property if it didn’t sell within an agreed period for a minimum price.
Modern agent
Now, it has launched a ‘modern estate agent offering’, a mix of agents in the field using technology to offer a traditional sales service bolstered by the firm’s iBuyer capability. It doesn’t require a very long memory to realise that Nested now resembles the early days of Purplebricks.
For example, the company has been testing its new approach in London during the pandemic. This saw ‘local property experts’ given territories and initial results suggest that in the five pilot areas it took 15% of the market.
The Axel Springer cash, which has been invested alongside extra funds from existing backers Balderton and Northzone Capital, will be used to expand the new model into 30 areas including outside the capital over the next 18 months. And if Nested can repeat its claimed 15% market grab elsewhere then traditional agents may have more to fear from it than Purplebricks – which so far as struggled to take 5% market share never mind 15%.
“We’ve built a truly modern estate agent where we hire the best local agents out of traditional agency and support them with unrivalled technology and unique features like our buying agent, chain management and advance,” says Nested CEO Matt Robinson (pictured).
At companies house the last accounts for Nested was in 2018, at that time the losses were huge, perhaps if we knew what the 2019 accounts looked like – a better picture of Nested’s success could be judged. Though the need for an extra £5,000,000 in 2021 probably is all anyone needs to know. A familiar trend of propping up loss making businesses who burn rather than earn. Maybe the final pivot for Nested will be into a traditional agency model, given that the public at present 92.6% of the time utilise this. I am 110% for new and modern and efficient and technology led businesses, but sanity rather than vanity, profit not loss must be an underlying philosophy. Twenty five million pounds in, and still no profit, just think if that money had been used to set up a normal agency, with a typical break even after 24-months from a cold start.