UK-based online letting service OpenRent has received a “multi-million pound” ‘media for equity’ investment from Northern and Shell Ventures, the strategic investment arm of media group Northern & Shell, TechCrunch reported today.
OpenRent is an all-in-one rental platform for tenants and landlords, enabling them to interact without facing the substantial fees demanded by letting agents.
The funding will enable OpenRent to launch a national TV campaign in the UK and utilise Northern and Shell’s other media channels, which include broadcaster Channel 5 and newspapers the Express and the Star, to support the company’s expansion through greater media reach.
Daz Bradbury, co-founder of OpenRent, said: “OpenRent has been profitable from about January 2013 – whilst our margins are extremely tight, we didn’t need cash to expand infrastructure or build a huge team, we just needed exposure to landlords.
“A VC is much less likely to spend money on advertising alone, but more importantly, with this setup we get a substantial discount on the media spent, as our deal is directly with the media owner.”
Northern and Shell’s corporate venturing unit focuses on investments in start-up companies that have already reached a certain level of market maturity, are ready to scale and are in a position where they can benefit from enhanced media exposure. The media-for-equity business model gives portfolio companies advertising time in return for revenue sharing or equity.