OnTheMarket has finally revealed its flotation which will raise £30 million of the £50 million it has hoped to receive from the City, three years after it first launched.
The 18.2 million shares it is to issue via its public offering are priced at £1.65p each and will start trading on AIM stock market on February 9th, valuing the newly-created OnTheMarket plc at £100 million.
Up to £25 million of the cash raised from the share issue will finance a marketing battle with ZPG and Rightmove, while the rest will be spent on an enlarged agent sales team and improvement to its IT systems.
The share issue reveals that although the “quality investors” it refers to in his comments about the public offering have been willing to invest in the portal, its initial hopes of raising more money have not been possible.
Agents who list on OnTheMarket, based on their branch size and how long they have listed with the portal, were given equity in the company in return for giving up their membership in the original mutual organisation.
CEO Ian Springett says: We believe that the new capital, together with our ongoing revenues, will support our strategy to build a strong agent-backed challenger to the incumbent portals.
“We intend rapidly to extend our customer base of estate and lettings agents, remaining committed to our core principles of offering sustainably fair prices for property advertisers and creating a premier search service for the most active property-seekers.
“The IPO will enable us to implement our marketing plans to build brand awareness and portal usage as well as to invest to scale up the supporting organisation and infrastructure to the benefit of consumers, agents and investors,” Springett added.