The investment, which was detailed in a board report released by Purplebricks, is worth a total of £125m for an 11.5% stake. Dr Andreas Wiele, president of classified media at Axel Springer, will join the Purplebricks board.
The investment is particularly significant for Purple Bricks after it reported that annual group revenues are expected to be around 5% lower than the expected £98m when it reports this spring. The company claims this is because of “adverse weather in late February and early March”.
The new relationship with Axel Springer is intended to help Purplebricks expand its overseas offering. The investment will primarily be used to accelerate growth of the US Purplebricks division, as well as expansion into other unnamed markets.
Axel Springer is an established international media company, listed on the Frankfurt Stock Exchange with a market capitalisation in excess of €7bn. Its main real estate brands are SeLoger, the leading property portal in France, and the German property portals Immowelt and Immonet, though the company may be best known for its flagship publication, German newspaper Die Welt.
Axel Springer’s strength in digital technology was also identified by Purplebricks as valuable to its business growth efforts around innovation and offering customers enhanced functionality and engagement.
Michael Bruce, CEO of Purplebricks, said: “Purplebricks is a fast growing company with huge ambition and in Axel Springer we recognise great people, knowledge and expertise. Together our ground-breaking strategic partnership will benefit both parties and help to bring positive change to the way consumers buy, sell and let property, while delivering value for all shareholders. There is a huge opportunity and together we can realise it.”
Dr Andreas Wiele, president of classified media at Axel Springer, added: “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. For Axel Springer, this minority stake offers the opportunity to participate in an innovative, fast growing business model in new markets.”
Purplebricks also announced two new independent non-executive directors: Adrian Blair, global chief operating officer at Just Eat, and Simon Downing, founder and executive chairman of Civica Group, a specialist software and digital solutions provider.
Purplebricks launched in the UK in April 2014 and listed on the London Stock Exchange in December 2015, where it is currently valued at £869m.