Avasa AI - Making the search for rental property substantially easier for tenants.
Business overview
Idea
Notice
Please note that whilst the campaign is labelled as EIS eligible, the company has its SEIS allowance remaining. We will therefore be looking to seek SEIS relief on the first £150,000 invested into the campaign and EIS relief on the balance. Any tax relief is dependent on personal circumstances and may be subject to change in the future.
Introduction
UK private tenants currently pay over £50 billion in annual rent, yet the search experience is broken.
We believe the ecosystem surrounding the UK property market continues to prioritise landlords & estate agents over tenants, who on average spend an average of around 40 hours finding a home that’s right for them*.
We aim to revolutionise the rental market for tenants, making the drawn out, painful process of renting quicker, simpler, and hopefully more enjoyable through a mix of smart technology & human interaction.
Our app helps tenants find areas & properties that match their lifestyle criteria (e.g. commute times, proximity to parks, etc.) within minutes, and lets them add family and sharers to the search. They can also connect with a personal concierge (Sherpa), who can do the search for them.
To reflect the unique requirements of each tenant, our technology will enable personalised search for every app user.
Since launch, we have had 3,900+ app downloads & 2,300+ registered users across website and app. Our Sherpas have helped over 45 tenants in their search for homes with a total rental value of over £800,000.
*Based on our own consumer research.
Intended impact
Rental search typically starts with reviewing online ads, chatting with dozens of estate agents, answering the same questions over and over again, and shortlisting properties. Then there are the countless (often needless) hours viewing properties shown by what can be ill-prepared or misinformed estate agents. You usually then have to quickly share your observations about properties with family or sharers so they can decide whether they should visit.
For cofounders Mayank and Valerie, it took 75+ hours, discussions with 13-14 agents, and 40+ viewings to find a property!
We aim to cut down time wasted with a lifestyle-based search focused on commute time for multiple sharers, proximity to gyms, hospitals etc. The app also provides the ability to assign own ratings / photos / videos / comments to individual properties for easier coordination.
Our long-term goal is to cut down time spent on home search for tenants to less than 10 hours.
Substantial accomplishments to date
• Launched the iOS app in July 2017 and introduced the second version in December 2017.
• Initiated the Android app development in February 2018.
• High profile media coverage: about 40 coverage pieces across TV, digital radio and print media such as Sky News, Metro, Evening Standard and Mirror.
• Paying clients as a fundamental part of the business model; clarity on unit economics achieved.
• Multiple lead generation channels firing in sync – social media, website, app, PR.
• Detailed data collection kick-started to map out tenant behaviour throughout the search process.
• Significant social media audience: 12,000+ Facebook followers with consistent 5* rating since inception, 4,500+ Instagram and 1,700+ Twitter followers; 14,900+ visitors since website launch in May 2017.
• Mobile app: 3,900+ downloads, 900+ users, 400+ email registrations.
• Average cost per app download starts at as little as £0.35 per download.
• Sherpa services: 14,900 website visitors; 1,500 contact sign up and 12 Sherpa clients.
• Cost per lead in Jan - Mar: less than £5.
• Expanded the team to include highly experienced Technology & Artificial Intelligence Advisors as well as a Product Manager (part-time).
• Initiated the plans for a rebranding of the business.
Monetisation strategy
Our model is tenants-focused: app & information products are free, while tenants pay us a fee for the Sherpa service. We don’t take any commissions from landlords or estate agents.
• ‘Search’ pack (£199): Sherpa shortlists available properties that closely match tenant’s requirements.
• ‘Find & Finalise’ pack (£599): a dedicated Sherpa assists the tenant to search, view up to 15 properties and sign the lease for their desired property.
• ‘Relocate’ pack (£899): in addition to the services in Find & Finalise pack, Sherpa assists the tenant to organise their move-in day.
We are also building:
i) An Artificial Intelligence-driven automated Sherpa (chatbot) to assist all app users throughout their search.
ii) Referral partnerships with businesses that provide services to tenants such as booking utilities, cleaning services, movers and packers, etc.
Use of proceeds
We intend to drive the following objectives:
• Scale fast in London: drive growth of App users as well as Sherpa clients.
• Develop app functionality and user experience with additional features to complete the tenant journey.
• Kick-start AI-driven product enhancements.
• Explore UK expansion.
Our planned budget split, subject to business conditions, is as follows*:
• Product development and IT infra: 45%.
• Marketing: 24%.
• Delivery of Sherpa services: 19%.
• Admin: 12%.
*Budget includes provision for a rebranding of the business.
Please note, The Urban Collective currently has an outstanding directors loan of £161,175. This loan is repayable only after a major funding round of £1 million or more is closed, and will be repayable in 12 equal monthly tranches. Interest of 5% p.a. will accrue on this loan from the month immediately following the close of this round, with this interest due at the same time as the principal repayments.
Market
Target market
The number of privately rented households in the UK has more than doubled since 2001, rising from 2.3 million to 5.4 million in 2014, and expected to reach 7.2 million by 2025.
Some key characteristics of private tenants market are:
• 57% of the households in the age group of 25 to 44 years,
• These renters have careers,
• 36.2% of households have children now, up from 24.6% in 2004/05, and,
• They have specific lifestyle criteria when looking for a home to rent.
We see a gap in today’s rental market, which focuses on the landlords rather than the needs of tenants. The major options available for tenants are to go through a relocation agency, which can be expensive, not withstanding the fact that they generally get a commission from the estate agents or landlord, or search on your own and spend on average about 40 hours to secure the right property.
Currently our primary target segment is London-based busy professionals, expatriates, and international students. Over time we plan to expand to the rest of the UK and key European cities as well.
Characteristics of target market
Initially, our focus is on London, which comprises around 955,000 private renting households in 2015/16 (English Housing Survey).
The customer base for our Sherpa service to-date has been a mix of busy professionals, families and international students relocating to London or moving within the city, with little spare time to look for a property.
In the case of international students or professionals, we found and secured a property for them before they relocated to London, allowing them to move into their new home directly on arrival, and thereby avoiding the extra cost of spending a couple of weeks staying in a hotel or at some other temporary accommodation.
We believe our clients are looking for an efficient and personalised rental search experience that takes into account their lifestyle criteria and specific needs (commute to work, local amenities, look and feel of the area, local schools, etc.), as well as streamlines the overall process, at an affordable price.
Marketing strategy
Our marketing strategy combines traditional marketing and growth hacking techniques, focusing on three core pillars:
• Build brand awareness.
• Drive user acquisition.
• Develop a community of brand advocates.
We have had significant positive PR coverage since our app launch in July 2017 with TV, print, radio, and digital media outlets, including Sky News, The Evening Standard, and the Sun.
• Sky News: https://www.youtube.com/watch?v=SP1xBZOrZE8.
• London Live: https://www.youtube.com/watch?v=ms1ma_1kjRs.
• The Mirror: http://www.mirror.co.uk/money/impossible-dream-...
We’ve also been driving targeted marketing campaigns through our social media channels (Facebook, Twitter, Instagram) to generate app users and free consultation calls for Sherpa services.
We feel that we have built strong engagement with our audience, through a curated content marketing approach addressing tenants’ pain points and providing advice about renting and life in London.
Competition strategy
We primarily compete against the traditional way of searching a property where tenants do all the work by themselves:
• Search through high street agents.
• The expats market is also served by relocation agents who assist senior corporate clients with visa, movers & packers, school admission for kids, etc. in addition to home search.
Recently, PropTech startups like Movebubble and Homie have started delivering better quality features and products to tenants.
We differ significantly from the traditional players as well as PropTech startups:
• They typically earn fees from either the landlords or estate agents, restricting their ability to provide unbiased advice to tenants.
• We provide a tech-driven, personalised service, which we think is affordable and accessible to mass market, instead of being restricted to higher paying tenants only.
• We focus on providing a carefully crafted end-to-end search experience, which we feel goes significantly beyond limited features.
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