Britain’s largest lettings agency bought by huge private equity firm

A Luxembourg-based private equity firm has taken a majority stakeholding in Britain’s largest lettings agency, OpenRent, making its two founders considerable fortunes along the way.

CVC, which has invested via multiple funds across a range of sectors in Europe and the US, is making its first major foray into Britain’s residential housing market with the investment.

It is effectively buying OpenRent, which by transaction is the nation’s largest lettings agency. CVC and the 14-year-old landlord portal say the new cash will be used to finance its next growth phase. The deal has yet to achieve regulatory approval but is expected to close later this year.

By growth, the joint statement says, they mean new tools for landlords and tenants to reduce the admin, complexity and cost of renting in Britain.

Founders remain

OpenRent founders Adam Hyslop (main image, right) and Darius Bradbury (left) retain significant equity in their company and will remain at the helm, reports PE Hub.

Bradbury says: “OpenRent has already proven that technology can transform the rental journey, but there’s still a lot left to go after. Our roadmap is full of new tools to empower landlords and tenants throughout the entire rental lifecycle, while making sure the product they already use keeps feeling delightfully simple at every turn.

“This partnership lets us build it all faster, with even more powerful technologies, and fulfil the vision for renting we’ve held since 2012.”

Jean-Pierre Saad, Managing Partner at CVC, says: “We are very excited to partner with Adam and Darius who have built a category-leading platform that has already changed how people rent homes in the UK.

“OpenRent, with its entrepreneurial and innovation-driven culture, is very well placed to continue to be the UK’s largest and favourite direct-to-landlord platform helping landlords and tenants alike to manage the increased complexity of the rental process.”

Significant toe-hold

OpenRent has achieved what many thought Purplebricks and other online lettings agencies were going to achieve but failed to do; carving out a significant toe-hold in the PRS.

It has been a thorn in the side of traditional lettings agencies, who have watched as many smaller landlords have switched from self-managing properties and tenancy starts through its platform.

In February this year research by CRM platform Alto found that among lettings agencies with fewer than five branches, a third said ‘DIY’ platforms like OpenRent are “a major threat”.

There was much less concern among larger firms, with more than half dismissing online lettings services such as OpenRent and For-Sale-By-Owner platforms as no danger at all.