Turning ZOOPLA into a £2.2 Billion Behemoth.

Classifieds going Digital and the creation of the Digital Property Group

As a group, we have been involved in the migration of print to digital from its very inception. In the early 2000s, we saw classified businesses in property, cars, jobs and general categories moving online and identified property as our core focus area. We searched the market to find promising early-stage companies and in quick succession we acquired three companies, at a cost of £62 million, that became The Digital Property Group.

Our first find was a small company based out of Brighton, but with a national presence and an interesting foothold in London, called FindaProperty. The second was a larger company called PrimeLocation, which had a strong presence in the premium market. Finally, DMGT acquired a free-to-list business called Globrix.

The Digital Property Group (DPG) kept the three independent brands which together achieved a clear #2 position in the property classifieds space.

The Digital Property Group / Zoopla Merger

Although DPG had a clear #2 position in the market, behind Rightmove, Zoopla emerged as #3, led by serial entrepreneur, Alex Chesterman. Zoopla, at the time, was backed by a mix of high profile VC investors, including Octopus Ventures and LocalGlobe, and strategic real estate agency investors, Countrywide and LSL.

It quickly became apparent that a merger between DPG and Zoopla would create a company capable of growing larger market share and challenging Rightmove’s position, and the merger occurred in May 2012.

Zoopla IPO and life as a Public company

Zoopla quickly integrated the technology back end and closed both the FindaProperty and Globrix brands while maintaining PrimeLocation as the premium brand of the Group. Zoopla went from strength to strength, reinforcing its position as the #2 in the market and achieving a “must-have” status alongside Rightmove for estate agents.

The company filed for an IPO and listed in June 2014, valuing the company at nearly £1 billion. At this stage, DMGT reduced its holding to c.30% and realised c.£180 million of proceeds.

A key pillar of Zoopla’s strategy was to broaden its offering to estate agents, beyond strictly listing properties, to include comparison, data and software services. To do so, Zoopla completed numerous acquisitions, including uSwitch (the energy-focused price comparison website), Hometrack (residential data services provider) and PSG (estate agency software). The acquisition of uSwitch was especially well-timed as it happened shortly before a “boom” in the UK energy switching market.

Silver Lake takes the company private

In February 2018, it was becoming increasingly clear that the next stage of ZPG’s growth would require deep technological expertise and strong product oversight, to ensure an end-to-end experience for homebuyers, and further capital to continue funding its acquisition strategy.

Silver Lake approached ZPG to take the company private and paid £2.2 billion. DMGT exited completely, bringing our total cash return over the fourteen years to c.£880 million.

Image courtesy of Zoopla.