Why I invested in Zoopla

After watching one of the firm's early investments join the London Stock Exchange, Alex Macpherson, head of the Ventures team at Octopus Investments, explains what he saw in Zoopla that first excited him.

A few weeks ago, early one morning the founders and entrepreneurs at the heart of Zoopla Property Group (ZPG) took the rarely trodden path to the London Stock Exchange to mark the beginning of their life as a publicly traded company.

It was a seminal moment for Alex Chesterman, Simon Kain and the investors – such as Octopus – that backed this seven year-old start-up.

Alongside Fred Destin of Atlas Venture, we were lucky enough to invest in ZPG in its earliest days. The initial public offering (IPO) marks one of those few occasions where a UK start-up has grown to become a billion pound company. We are incredibly proud of our partnership with Chesterman and Kain but know full well where the credit for this success lies: a supremely and unusually talented management team led by Chesterman – an inspiring, personable and industrious leader.

It is easy to join the dots and take the meteoric rise of ZPG for granted. However in 2007 when the business was launched it was one of over 20 such websites in the UK and soon faced the prospect of a stalling property market as the world financial markets began to unravel and Lehman Brothers collapsed.

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It took nerve and resolve to navigate this market. Survival (let alone success) was not assured. But Chesterman did not blink. He presented his plan and vision with absolute confidence – and along with a few others, we believed.

Then as now, we steadfastly believed that the single most important element of any start-up success is the people. We had been fortunate to back the duo in their previous business that merged with several others to become LOVEFiLM (now owned by Amazon). We sensed that in this new venture there was something special, here were two entrepreneurs who may just be able to bend and shape the market to meet their will.

Zoopla co-founder Alex Chesterman

Alex Chesterman can now count himself as a serial entrepreneur

As investors, we were also very lucky. Timing is everything. Having only just raised our first fund of note, Octopus was a relative minnow on the European venture capital stage and we benefitted from the paralysis borne out of the credit crisis that was gripping the larger, more proven and more established funds in our industry – and jumped in with both feet.

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During 2009, ZPG acquired Thinkproperty.com from the Guardian Media Group and PropertyFinder from News International and Australian company REA Group. It was these deals that grew and transformed the business, consolidating the online property landscape within the UK. It is the mark of a great team that even when the market was at an all time low, ZPG was able to grow and establish itself as a serious contender.

There are very few market sectors that are capable of supporting billion pound businesses focused solely on one geographic territory. The online property market is one of these and ZPG have taken full advantage of that opportunity.

Zoopla mobile app

Zoopla’s digital offering has grown to include mobile-based services

It is a rare thing for a British start-up to be valued close to a billion pounds, but it is no longer as exceptional as it once was: even within our own portfolio, we see the founders of Secret Escapes, SwiftKey, YPlan, Calastone and several others look on at ZPG’s success and know that the bar is high but achievable. Momentum and confidence is building. Long may it continue.

This article is issued by Octopus Investments Limited which is authorised and regulated by the Financial Conduct Authority for use by journalists in their professional capacity and should not be relied upon by retail clients. The value of investments, and the income from them, may fall or rise.  The information in this document should not be construed as offering investment or tax advice.

Alan Dobie

Alan Dobie

Alan Dobie was assistant editor at Vitesse Media Plc before moving on to a content producer role at Reed Business Information. He has over 17 years of experience in the publishing industry and has held...

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