In the last week, CoStar Group confirmed its acquisition of OnTheMarket (OTM) for a staggering £100 million. This is set to shake the property portal industry, with both companies committed to maintaining OTM’s position as a platform for agents with fair pricing, while elevating it to being a fierce challenger for both Rightmove and Zoopla.
What is OnTheMarket?
OnTheMarket, founded in 2013, currently holds its place as the third most visited residential property portal in the UK (right behind Rightmove and Zoopla). Headquartered in London, the property portal saw a 1% increase in revenue in the past year, up to £16.9 million. It also however saw a 15% decrease in adjusted operating profit, which stood at £1.1 million. The portal has faced a dip in the number of agents listing properties on its website. Recently, it has seen a 2% total drop in agents, and a 10% drop in monthly leads per advertiser.
Who are the CoStar Group?
CoStar Group, a £33 billion global property data group, operates in 15 countries and occupies a spot on both the S&P 500 and NASDAQ 100. It is a huge player it is in the property world. The group boasts a staggering 280 million website visits recorded in September, and a record of transforming major property portals. After acquiring Apartments.com in 2014, CoStar Group grew it from the 5th most used residential rental platform in the US to number 1.
The Future of OnTheMarket
CoStar Group’s ambitious plans for OTM involve a substantial investment of £46.5 million into sales and marketing in the first year. This is 6x what OTM currently spends on this sector, and 3x the annual media spend of Rightmove. Shareholders will receive 110p per share, a substantial increase from the previous 70p share price. Further to this, OTM’s share price has soared by an impressive 52% (meanwhile Rightmove’s has fallen by 10%). 29.51% of OTM’s share capital, including its 6 largest shareholders, support the sale, and we expect to close the transaction in the fourth quarter of 2023. However, not everyone supports the deal. Founder Trevor Abrahmsohn deemed the idea “stupid” and “a terrible deal” for shareholders. He further argued that it undervalues OTM’s shares by around 33%.
This week, OTM has partnered with Push Property, an automated social media service. This has allowed them offer their users a heavily discounted price to use the product. Agents can automate social media posts about new properties, sale/ let agreements or price changes across Instagram, Facebook, X (formerly Twitter), and LinkedIn. This step could be vital in OTM’s desired climb in the property portal market and represents an early example of CoStar Group’s increased budget for marketing.
With CoStar Group’s impressive resources and investment, OnTheMarket should rise through the ranks of the property portal market . RENT+, the Combined CRM for Lettings, Sales, and Management allows seamless property uploads directly to OnTheMarket and other major portals. Our software can help your letting agency to stay ahead of the property portal market and reach a wider audience.
