Real estate agency

Flat-rate real estate agency Purplebricks secures $177 million investment to fund US growth

Package real estate agency purple bricks expanded to the US last year after building a successful business in the UK and Australia, and securing a major investment from the European media giant Axel SpringerPurplebricks’ US expansion is about to go into overdrive.

Purplebricks announced on Monday that Axel Springer would invest $177 million in the company. In exchange, Axel Springer acquires 11.5% of the company.

According to Purplebricks, the funding injection will be used to “accelerate Purplebricks’ expansion into new target markets, advance technological innovation and expand the company’s service offering.”

The company said $71 million of that $177 million is set aside to accelerate the company’s growth in the United States. According to the company, Axel Springer’s $71 million is about double what the company used to fund its US operations. far.

Specifically, Purplebricks said the money will be used to “support and improve the company’s infrastructure, technology, depth of management, advertising and marketing, and recruitment and training.”

The company’s first US market was Los Angeles, later expanding into California in Fresno, Sacramento and San Diego.

The company was already planning its next move to the United States, announcing earlier this year that it planned to expand to New York.

Originally, Purplebricks said they were targeting June 2018 for their New York launch, but thanks to investment from Axel Springer, Purplebricks are bringing their New York expansion forward two months to April 3, 2018.

The company said its New York regional headquarters will be located in Midtown Manhattan.

“Since our launch in the United States in September 2017, we have achieved tremendous success and recognition in what we consider to be one of the most competitive residential real estate markets in the world,” said Eric Eckardt, CEO of Purplebricks at United States.

“Our platform has been well received in all four California markets, and we are excited about the promising opportunity we see in New York (designated market area),” Eckardt added. “The $71 million of this investment will be used to recruit strategic candidates who will enhance our growth, support technology updates and enhance our marketing and advertising programs, giving us increased visibility in the region.”

Purplebricks says what sets it apart is that home sellers only have to pay a flat fee of $3,200 to list their home and, at closing, pay the agent’s commission. Buyer. The flat rate is the same for houses of all values.

By paying a fixed fee for a technology-enhanced real estate experience, sellers can save thousands of dollars on the sale of their home, the company claims.

According to Purplebricks, a New York homeowner selling a $560,000 home can save $13,600 by using Purplebricks compared to paying the standard real estate brokerage commission.

And thanks to Axel Springer’s investment, New York homeowners will be able to use Purplebricks’ services much sooner than expected.

“Axel Springer’s strategic investment in the Purplebricks platform is a clear endorsement and reflection of confidence in our business model and global ambitions,” said Michael Bruce, Founder and CEO of Purplebricks Group.

“This investment will serve to bring our highly differentiated, profitable, and consumer-centric model to buyers and sellers in new markets across the United States more quickly,” Bruce continued.

“Furthermore, Axel Springer’s experience and success in scaling his business should make Purplebricks’ continued growth more effective and efficient,” Bruce added. “Furthermore, Axel Springer’s strengths in digital technology and the significant resources he has deployed in IT development should also benefit Purplebricks as we continue to innovate and deliver functionality and engagement to our customers. improved.

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