When Zoopla.co.uk launched in 2008 it entered a market dominated by some big players. Online property portals had started to gain impressive traction among web users so founders Alex Chesterman and Simon Kain knew they had to offer something a little more innovative than yet another site listing properties for sale. The offering they presented us with had the voyeuristic among as champing at the bit – a comprehensive online library which enabled owners, buyers, sellers and agents to share knowledge, add content, compare house prices and gain a value estimate on properties, calculated using the site’s complex proprietary algorithm.
In two short years, the business has managed to build a veritable skyscraper on top of some incredibly sound foundations. Having bought out a couple of major competitors the site added sales and lettings listings to its portal and subsequently became the second biggest UK property site, sitting behind Rightmove.com. “It was always the plan to become an all encompassing resource for the property market,” says Alex. “We just started with the hard bit – the area nobody else was focusing on.”
Sound track record
Alex and Simon were certainly no strangers to web success when they started working on Zoopla.co.uk. Alex was one of the founders of DVD rental site ScreenSelect.co.uk which later merged with several others to become Lovefilm, while Simon was the company’s chief technology officer responsible for building the platform. The pair saw great potential in a web property portal that offered users more than just listings and took inspiration from U.S models Trulia and Zillow when developing a UK offering. However, with 27 million homes to list information for, development of the site was an arduous and daunting task requiring incredibly large volumes of both man and computing power. As a result, significant funding was needed from the outset. The first funding round, in June 2007, saw the pair take on £1.5m from Atlas Venture, who then went on to invest a further £3.75m alongside Octopus Ventures in 2009.
While many businesses have found the economic downturn a massive barrier to both growth and funding capabilities Alex insists the recession has been one of the biggest drivers to Zoopla.co.uk’s remarkable growth since its launch. “The downturn presented an opportunity for consolidation that might not otherwise have come about,” he explains. Zoopla.co.uk acquired the Propertyfinder Group from News International and Thinkproperty.com from the Guardian Media Group. “These businesses were loss-making and their former owners didn’t have the appetite to carry on funding them in this climate. Had conditions been different, I don’t think we’d have had the opportunity to acquire such well-known players in the space.”
Closing in on the top spot
Prior to the acquisitions, Zoopla.co.uk was the fastest growing property site in the UK in terms of traffic and had already reached the top five by the time they bought the other platforms. “After the acquisitions we spent the summer working on the platforms and within three months we’d integrated them all under the Zoopla brand,” says Alex. “That was a significant task which we executed very well and instantly put us at number two in the market.”
The site’s revenue now comes from two distinct streams – listings and advertising from estate agencies and the sale of market information from Zoopla’s extensive data gathering platform. The plan now is to ramp up marketing spend – Alex says a whopping £3.5m has already been allocated for this over the coming year – and to close the gap with RightMove. “We have a very healthy, profitable business now,” says Alex. “The housing market may not be entirely out of the woods but that’s a short term condition. We’re certainly expecting to see growth over the coming two or three years and we’re fast becoming the ultimate online property destination.”