Bonanza for backers as estate agent takes purple brick road to AIM

The company raised £58.1m in total, with £25m to be invested in the business

The backers of the online estate agent Purplebricks are poised to cash in £33.1m after the company announced float plans.

The launch on the junior AIM market puts a £240m price tag on the company, excluding a potential £15m extra in share options for its top management.

The co-founder and chief executive Michael Bruce will reduce his stake in the float, as will the former Capita chief executive and Purplebricks chairman Paul Pindar. The star fund manager Neil Woodford is another high-profile backer along with Errol Damelin, the founder of payday lender Wonga, who will not be selling down his holding. Mr Bruce’s remaining stake is worth a potential £41m.

The company is raising £58.1m in total, with £25m to be invested in the business. It has 60 per cent of the online market with about 4,300 properties for sale. It is the first of a host of new online agents – including rivals such as eMoov and easyProperty – to try its luck with an initial public offering.

Purplebricks undercuts traditional agents, which charge an average of 1 per cent to 3 per cent on the sale price, averaging more than £4,000 including VAT. Purplebricks’ average fee is much lower at £1,080. Customers can choose to pay upfront or delay the payment until the property is sold – unlike traditional agents, which are only guaranteed a fee if they sell the property.

Mr Bruce said: “The business model is disruptive and has allowed us to establish Purplebricks as a nationwide agency... with a more flexible cost structure which supports the sustainability of our pricing strategy.”

The company plans to use the funds to grow its business in London and Scotland, raise awareness of the brand and invest in technology and staff.

Shares in the company, which was advised by Zeus Capital, will begin trading on 17 December.