Real estate agent Purplebricks (LON:PURP) have announced that they have succeeded in raising £50 million in capital in less than 24 hours, to fund expansion efforts in the U.S.
The agent announce that it plans to use the funds to launch its business in a number of key U.S states, following the placement of almost 23 million shares at 220p each on Wednesday.
The company released the following statement addressing the plans for expansion into the U.S property market. It read:
“The Directors intend that the first stage of the roll out of the Purplebricks proposition in the US will begin in the second half of 2017. The Directors consider that there is a significant opportunity for the Company to make a meaningful impact on the US real estate market, which is estimated by the Company’s management to be worth approximately US$70 billion annually in total real estate commission income.”
Whilst no additional formal statement has been released since the successful fundraising, Chief Executive Michael Bruce commented on Wednesday amid news of the the cash call.
He said: “Our customer proposition of high quality service and value, delivered through the combination of technology and people, is driving irreversible change in the UK and Australian markets.
“We are confident that with our understanding of the US market and our experience from having already launched in two markets, Purplebricks can build a significant business in what could be one of the most fascinating and rewarding real estate markets in the world.
“As with our UK and Australian launches we will adopt a state-by-state roll out strategy.
“The funds raised through the placing will not only be deployed to build the Purplebricks brand in the US but, also, the people and infrastructure needed to manage rapid growth in that market.”
Purplebricks is an online British real-estate company that was founded in 2014 by brother Michael and Kenny Bruce. The company was floated on the London stock-market in December of 2015, and turned over its first ever profit of £300,000 in October of 2016. The online agency has been valued at £560 million.
Amid announcement of the successful round of capital raising, shares in Purplebricks rallied during early Thursday trading. Currently, shares are up 17.74 percent as of 11.45AM (GMT).