Purplebricks has secured a £34m financial lifeline from its backers. The funding comes just days after HMRC filed a winding-up petition against the online estate agency.
Funding details and investor support
Sir Charles Dunstone’s investment firm, Freston Ventures, converted £25.6m of loans into equity in June. The investment went into Strike Limited, Purplebricks’ parent company. In addition, Freston and asset manager Toscafund have provided around £8.5m of new loans to Strike. Strike has secured the lending against its assets.
Meanwhile, the fresh funding comes amid continued pressure on the business. It also follows the return of Purplebricks founders Michael and Kenny Bruce.
HMRC action
The disclosure comes just days it was reported that HM Revenue & Customs had filed a winding-up petition against Purplebricks. Purplebricks blamed the action on an “admin error” and said it had resolved the issue.
A spokesman said: “We were surprised by the petition from HMRC. We were in active dialogue on an admin error and only became aware of the filing of the petition once it had been submitted. “To be clear, our liability for taxes as they are due have been dealt with and the petition is being withdrawn.”
Similarly, accountancy firm BK Plus attributed the issue to an administrative error. It said the “position with HMRC is an administration error and the matter has been resolved”. For its part, HMRC added: “We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we’ve exhausted all other options, in order to protect taxpayers’ money.”
Loans converted into equity
At the same time, the latest funding substantially reshapes the finances of Purplebricks’ parent company. Purplebricks said fresh equity investment had reduced its loans and facilities to £6m this financial year. However, that figure excludes around £2.5m of short-term loans from Freston. Purplebricks is awaiting a similar-sized equity injection from an unnamed investor.
A Purplebricks spokesman said: “Our new leadership has the full support of our investors. We have made new equity investments and long-term loans to the business and will continue to invest for further growth and success.”
However, Strike’s 2024 accounts had already raised concerns about its financial position. Directors identified a “material uncertainty” over the company’s ability to continue as a going concern. They also warned that Strike would “make significant losses” through to September 2025. At the time, directors blamed the housing market slowdown and higher mortgage rates.
Accounts overdue
Meanwhile, Purplebricks has yet to file its accounts for the year ending March 2025. The company blamed the delay on the appointment of a new chief financial officer. Nevertheless, Purplebricks says it will file the accounts in the coming weeks.
Separately, the latest developments coincide with the return of Purplebricks founders Michael and Kenny Bruce. Michael Bruce left the original business in 2019. The brothers launched Purplebricks in 2014 as a fixed-fee online challenger to traditional estate agents. Purplebricks later floated on the London Stock Exchange. At one stage, investors valued the business at around £1.4bn.
However, its fortunes subsequently reversed as losses mounted. Its push into overseas markets contributed to those difficulties. Eventually, Strike bought the Purplebricks business and assets for a nominal £1 in 2023. It later dropped the Strike consumer brand in favour of Purplebricks.
Now, the £34m package provides another substantial injection of financial support. Purplebricks is attempting to rebuild the business under its new leadership.
