Purplebricks and Axel Springer have entered into a joint venture, NewCo, initially split 50/50, in order to jointly acquire a stake in German online estate agent Homeday.
Purplebricks said that while the online market in Germany is still small, it is a fast-growing market and Homeday has developed rapidly to become the market leader in just four years, achieving close to 50% market share of the online space).
Purplebricks and Axel Springer, via NewCo, will have an option to acquire up to a further aggregate 28.5% in Homeday in August 2019 and, subject to certain performance criteria being met, the existing Homeday investors and founders will have an option to require NewCo to make such further investment.
The Homeday management team, led by CEO and founder Steffen Wicker, will continue to run the business under the Homeday brand, with the added support of both Axel Springer and Purplebricks .
Purplebricks and Axel Springer will each have a seat on the Homeday board, effective from completion of the first round of investment in Homeday
Michael Bruce, Group CEO 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.
“Steffen Wicker and his colleagues at Homeday share many of our own values and have a clear ambition to become Germany’s leading online real estate agent by providing a trusted and transparent service to customers. 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.”