OnTheMarket (OTM) has listed on AIM, raising £30m to build market share in the UK online property portal space. Founded as a mutual by estate agents, it is more closely aligned to their interests than the two main incumbents. The monies raised will be invested in sales and in IT, as well as funding a major marketing campaign to grow the agency network and increase brand awareness. This will push the group into loss for FY19 and FY20, with profits modelled from FY21 on. Backed by long-term agent contracts, OTM has high levels of recurring income on a scalable platform.
Going For Share
The UK online property market is dominated by two portals, Rightmove and ZPG/ Zoopla, the former being clear market leader. While they generate high levels of traffic, prices charged to participating agencies have risen, with no respite in sight prior to OTM’s arrival. OTM was set up as Agents’ Mutual as an alternative, to provide a positive search experience for consumers, while acting in the interests of agents. Around 20% of participating agents’ total inventory is placed exclusively on the OTM portal for a limited initial period. The flotation raised £30m gross to scale the business, step up agent recruitment and drive traffic. OTM can issue equity to attract key agents to the network on long-term contracts (not possible to model in advance), with others being attracted in with discounted or free listings.
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