Purplebricks finds a new home in Europe as online estate agent embarks on joint venture to take a stake in Germany's Homeday
- Purplebricks & publisher Axel Springer have entered into a joint venture
- Online estate agent said it has invested £11.1 million in Germany's Homeday
- Germany has Europe's second largest residential real estate market
British online estate agent Purplebricks has entered the continental European market after revealing it has taken a joint stake in its German counterpart Homeday.
The stake was acquired via Purplebricks and publisher Axel Springer entering into an equally-owned joint venture, called NewCo.
Britain's biggest online estate agent said that it has invested £11million in Homeday with Axel Springer putting in the rest of the £22million.
Michael Bruce, the group chief executive of Purplebricks, is excited to join the German market
NewCo will have an option to bag a further 28.5 per cent in Homeday in August 2019.
Existing Homeday investors and founders will also have the option to require NewCo to make such further investment, if certain performance criteria have been met.
Homeday, launched in 2015, will continue to be led by its founder and chief executive, Steffen Wicker, as well as continuing to be run under its current brand.
Once the initial investment is cleared, Purplebricks and Axel Springer will each have a seat on the Homeday board.
The first investment round is still subject to regulatory approvals.
Shares in Purplebricks have risen since it announced the venture.
Michael Bruce, group chief executive of Purplebricks, said: ‘Our investment in Homeday secures for us a strong foothold in Europe's second largest residential real estate market.
‘This is a good opportunity for Purplebricks, allowing us to partner early with a dynamic and committed management team, while remaining focused on realising the opportunity in our existing markets.’
Bruce added: ‘We are confident that with the combined support of Purplebricks and Axel Springer, the Homeday management team will help to transform the German market, and in the process deliver exceptional value for customers and shareholders.
‘I am pleased to report that we continue to perform in line with our expectations and make further gains in market share despite what are challenging market conditions in the UK real estate sector.’
Despite Homeday only launching three years ago, it has achieved close to a 50 per cent market share of the online space. It anticipates strong revenue growth in 2018 and has budgeted that it will breakeven in 2021.
By comparison, Purplebricks' share of the UK online market remains above 70 per cent.
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