Mashroom pivots to proptech as it sells lettings book to rival
Mashroom has sold its lettings book including rent collection and management portfolios to rival, lettingaproperty.com, headed by Jonathan Daines.
Online-only lettings agency lettingaproperty.com has bought the rent collection and property management book of Mashroom, which has pivoted its business to become a lead generation platform for agents.
The acquisition, which is for an undisclosed sum, means lettingaproperty.com now has a lettings book of some 1,800 homes with a rental income of £29 million a year. This includes small and portfolio landlords as well as build-to-rent operators.
All Mashroom’s clients will be transferred to lettingaproperty.com, which was founded in 2008 and charges landlords between £59 a month and £119 a month plus 4% of the rents, the latter being for full management.
Mashroom was founded by former venture capitalist Stepan Dobrovolskiy also in 2018 and until recently offered its service for free to both landlords and tenants, generating revenue from commission gained from selling financial products.
In 2020 it raised £4 million from investors and the Government to fund the business, which in 2019 bought the website and customer database of defunct online estate agency emoov after it entered administration.
A statement from Mashroom says selling its lettings book is a ‘strategic shift’ which allows it to leverage the firn’s “extensive industry knowledge and technological capabilities to support letting agents in growing their portfolios and enhancing their services”.
Innovation
Jonathan Daines (main image), CEO of lettingaproperty.com, says: “The swift and smooth migration underscores our commitment to delivering exceptional service and technological innovation.
“Our enhanced landlord dashboard will provide Mashroom’s clients with unparalleled convenience and efficiency in managing their properties.”
Adam Male, CRO of Mashroom, adds: “The deal to integrate our existing rent collection landlords into lettingaproperty.com’s service, marks the beginning of an exciting new chapter for Mashroom.
“By pivoting to provide targeted leads for letting agents and mortgage brokers, we are able to focus on what we do best – leveraging technology to connect the right people and create opportunities for growth within the property rental market.”
Daines says he is on the hunt for similar opportunities to acquired lettings books.
Got to love a company that criticises our profession, tries to ‘disrupt’ it by undercutting the market, fails- and then decides to become a supplier to the marketplace it spent the last few years attacking.
Interesting word pivot, as Mashroom in its last accounts had burnt through £5M had £3M of debt (yes some convertible loans) so this is possibly just a fire sale of assets. And as to building a new business on the capture of mortgage leads and lettings leads up river of over 20 other established property technology companies already in this field – would seem to me a race to the bottom of a very crowded arena, but then what do I know. First rule of business if it never makes a profit, and only stands up with external capital, then it is not a business but a vanity project, look out for a lot more companies pivoting in the coming months.