Media giant Axel Springer, which owns several property portals, has made ‘hybrid agents’ one of its top priorities.
The business last year made a £125m investment in Purplebricks, and has also joined up with Purplebricks to invest in the acquisition of German online estate agent Homeday.
Analyst Mike DelPrete says this is notable, because: “Axel Springer owns several top portals whose customers are the same real estate agents that Purplebricks is trying to disrupt.
“Furthermore Axel Springer is the only major international entity that has targeted online hybrid agents as a future growth priority.
“In its latest presentation to investors, hybrid agents are included as a top priority for the core classifieds business.”
DelPrete says: “Continuing to serve your customers while entering into direct competition with them is a delicate balancing act.”
However, he described the combination of Axel Springer and Purplebricks as “powerful” – and a hard one to beat.
He says: “Axel Springer and Purplebricks are quickly building a potentially insurmountable lead in the online hybrid space globally. There is no runner-up in the sector: it’s a one horse race.
“Purplebricks has proven the online hybrid model works in the UK and is aggressively launching in other markets.”
What, asks DelPrete, is stopping other media giants, including News Corp, from entering the space: “It’s either capital, ambition, or fear of upsetting their agent customers.”
DelPrete concludes there is undeniable momentum, with portals moving closer to the transaction: “Axel Springer’s bet on online hybrid agents, in direct competition with its real estate agent customers, is the latest example of this evolving strategy.”
Axel Springer last March paid £125m for an 11.5% stake in Purplebricks, paying £3.60 a share.
It later upped its stake to 12.5%, buying 3m more shares at £3.07 each in July.
Yesterday, the shares were worth a lot less than Axel Springer paid, finishing the day at about 163p.
In October, it was announced that Axel Springer and Purplebricks were setting up a joint holding company, NewCo, to acquire a 22% stake in Homeday, with the ability to acquire the remaining shares through further rounds of investment.