Serial entrepreneur Steve Smith has raised £500,000 on crowdfunding platform Crowdcube for his new business, EstatesDirect.com.
Now two years old, EstatesDirect.com serves as an online estate agency which differentiates itself by charging a fixed free to market, sell or let a property – with price and location not factoring into the cost.
Its crowdfunding pitch, which started off as one seeking £250,000, has attracted 191 backers who now share a 10 per cent equity stake.
With 450 properties sold since foundation, Smith says that EstatesDirect.com will now be rolled out across the UK.
‘We want to make EstatesDirect.com the UK’s largest personal estate agency network within the next few years,’ he adds.
‘The estate agency market is huge, but is currently dominated by high street agents that charge exorbitant fees – our aim is to bridge the gap between online and high street and make the process easier and cheaper.’
Set up by Steve Smith and Dave Dodd in 1990, the duo’s Poundland retail chain grew to over 500 sites and revenue of £880 million. Having sold his stake in the business for £50 million in 2002, Poundland recently joined the London Stock Exchange with an initial value of £750 million.
Poundland has grown from one store in Burton-upon-Trent in 1990
Smith’s EstatesDirect.com will be looking to grab a share a UK estate agency market which saw 869,000 homes sold during 2011.
Luke Lang, co-founder of Crowdcube, says, ‘When the founder of Poundland, the chairman of Gieves & Hawkes and Michel Roux Jr come to us to secure funding, you realise just how much the crowdfunding market has matured. It’s now a serious source of investment and we’re prod to attract such high calibre interest.’
Figures recently released by innovation charity Nesta, in association with the University of Cambridge and the University of California, showed that the alternative lending market was forecast to hit £1.6 billion by 2014. The growth of alternative finance was shown to be 91 per cent since 2012.
Peer-to-business lending achieved a notable £193 million in 2013, invoice trading platforms £97 million, equity crowdfunding £28 million, and reward–based crowdfunding £20.5 million.
