Last week it was revealed that the Propertyfinder’s management buy out attempt had failed and that the REA Group and News International had entered into a heads of agreement with a mystery party. This mystery party has now been confirmed as being Zoopla.
Zoopla is a relatively new entrant to the UK online real estate market having initially launched a site around home prices and more recently moving into advertising homes for sale in the UK using the pay per lead model. Earlier this year Zoopla closed out a £3.75m capital raising. Check out our coverage of Zoopla over the last year.
On reflection, this deal makes sense by providing Zoopla with a boost into being a serious competitor in the market and it gives propertyfinder.com and its team a new lease on life.
The deal clearly makes sense for Zoopla. It allows them to short cut years of work and to join the upper eschelons of the UK property portal market.
- They will immediately get a boost in overall traffic by accessing more than 1.2 million people using propertyfinder.com
- They will get access to a strong existing brand
- They will have a direct billing relationship with 5,500 agents around the UK
- They can move from a pay per lead model to the most successful pay to advertise model
- They can have access to a strong, existing revenue stream
- They now have access to a strong team – especially the direct sales team of propertyfinder.com
The deal also makes sense for Propertyfinder by giving it a new lease on life.
- Most people at propertyfinder.com should retain their jobs
- The propertyfinder.com brand will continue to live in the UK
- Propertyfinder will probably have a new, more innovative technology platform to drive the business
- The agents using propertyfinder will have access to a broader range of innovative technologies
The big winner from the deal will be Rightmove while DMGT and its Findaproperty and Primelocation brands will face stiffer competition from a re-energised Zoopla/Propertyfinder. If Propertyfinder had closed, DMGT would have a clear run at Rightmove however the continued presence of Propertyfinder means that they have to split their attention between Rightmove and Propertyfinder.
The challenge now for the team at Zoopla is to have a clear model for the future, to get the existing Propertyfinder team engaged around the future and to make sure that this is done as quickly as possible with minimal impact on visitors and agents who currently use Propertyfinder.