German publisher and property portal owner Axel Springer has invested £125 million in Purplebricks for 11.5% of its share capital, it has been announced, subject to a board meeting likely to rubber-stamp the deal next month.
The surprise move by the €7 billion publisher of Europe’s largest tabloid newspaper Bild is to help fund a faster roll-out of the hybrid agency in the US, to prepare for entry into new markets and to improve its IT systems.
Berlin-based Axel Springer’s investment, which echoes the Daily Mail’s involvement with Zoopla, is being led by its classified advertising chief Andreas Wiele, who joins the Purplebricks’ board as a non-exec director.
But the investment also adds to Axel Springer’s existing property portal portfolio – it operates several leading European versions of Rightmove including SeLoger, Immowelt and Immoweb.
And like many UK publishers who have invested in digital media in the past, the move is designed to offset the huge migration by many agents from traditional publishing to online, and suggests an imminent move by the hybrid agent into European markets such as Germany and France.
“Under the leadership of its founder Michael Bruce, Purplebricks has created a highly innovative digital real estate platform and has become the clear market leader in the UK in a short space of time,” says Andreas Wiele.
“For Axel Springer, this minority stake offers the opportunity to participate in an innovative, fast growing business model in new markets.”
The deal is being funded through a £100m purchase of new shares in Purplebricks, and the buy-up of existing shares from several of Purplebricks’ senior management team.
“The strategic partnership with Axel Springer is ground breaking and will propel Purplebricks further towards our strategic goals and global ambition,” says Purplebricks’ CEO Michael Bruce.
“We now have the platform, funding and, through Axel Springer’s experience, as well as the appointment of four new leading non-executive directors, the expertise to achieve our vision.”