Following a period of frenetic deal making and customer acquisition, GrowthBusiness catches up with serial entrepreneur Alex Chesterman to get the inside track on Zoopla Property Group.
Starting a property business in the aftermath of the collapse of Lehman Brothers and the economic quagmire that followed would probably not seem like the most logical thing to do, but it takes a seasoned entrepreneur to spot a gap in the market when others are retreating.
For Zoopla Property Group co-founder Alex Chesterman it is a decision which has ultimately paid off in the long run, and has seen his business scoop Europe’s Most Exciting Investor Backed Company of the Year at the GrowthBusiness and GP Bullhound Investor AllStar 2013 awards.
Before founding Zoopla back in 2008, Chesterman had moved from the US – where he was executive vice president of the Planet Hollywood restaurant group – back to the UK to set up on-the-go food chain Bagelmania. As if that wasn’t enough, he then went on to establish DVD rental company ScreenSelect, which later went on to merge with LOVEFiLM – and we all know how that turned out.
It’s been a steady climb for Zoopla over the last five years, which culminated with the business joining forces with The Digital Property Group. Having then become Zoopla Property Group, the business now has its eyes firmly set on knocking rival venture RightMove.co.uk off the perch as the UK’s top property portal.
Speaking with GrowthBusiness, Chesterman says the company’s success can be dated back to its foundation when it moved into a market which was seeing its fair share of inhabitants retrench.
‘Now we are coming out of a five-year period where people are familiar with the difficulties,’ he says. ‘The market has come out of it much stronger, and the main thing that has changed is the continuing transformation in the way people search for property.’
For most of us, the search for a rental or purchase property inevitably starts online – a trend which didn’t exist ten years ago.
Chesterman reveals that Zoopla now occupies a market which is a lot less crowded then when it joined. ‘There are less players today, but those players are providing better consumer experiences as they have a fuller set of features and inventory,’ he adds.
It all boils down to confidence, he believes, and the way in which Zoopla and its rival sites are providing this through a more comprehensive and integrated product package.
As Europe’s Most Exciting Investor Backed Company of the Year, Zoopla has been adept at linking up with the kind of venture capital firms which can help with accelerated growth.
Its first funding round came back in June 2008 when Atlas Ventures led a £1.5 million investment. A year later, Octopus Ventures joined up with Atlas to close a larger £3.75 million transaction. A subsequent round worth £1.75 million from existing shareholders and £1.5 million debt facility provided by Silicon Valley Bank in December 2010 have followed.
Its growth to date has been a two-pronged attack – both organic and acquisitive. So far Zoopla has made ten acquisitions in moves which are described by Chesterman as being opportunistic.
‘Our investors have been very supportive of the business, and that support was very important during the times when the market was weakening,’ Chesterman reveals.
‘The decision to put our foot down when others were pulling back and make bold acquisitions of those sometimes bigger than us were plays which needed some risk-taking on their part.’
Zoopla has always tried to differentiate itself from rivals with the services it offers consumers. The business was a pioneer in its use of complex algorithms that valued each residential property in the country.
Its May 2012 acquisition of UpMyStreet.com meant that Zoopla was then able to offer information on local areas in the UK such as demographics, crime reports, property prices and job openings.
With his company’s acquisitions, Chesterman is looking to buy consumers, traffic, customers and inventory.
‘Those are straightforward but if we can achieve those objectives through an acquisition more effectively than building them then we make that determination,’ he adds.
Some would argue that building a business primarily through acquisition is not as impressive as solely through organic means, but integrating ten companies into a fast-growing digital firm is an achievement in itself.
Like many businesses in the technology space, Zoopla is putting a lot of weight behind enhancing its mobile services. Chesterman reveals that 46 per cent of its 40 million visits per month now come through mobile devices. With 18,000 agents/developers now advertising on the site, and one million property listings available, Zoopla’s service is now used by 63 per cent of house hunters – impressive stats for a five year-old business.
Cream of the crop
In picking up its award at Investor AllStars, Zoopla beat off competition from Believe Digital, Fly Victor, Klarna, MedicAnimal, Rovio and Secret Escapes.
Even for a seasoned business builder like Chesterman, he is still in awe of what some of Europe’s most promising technology-enabled companies have achieved, he says.
‘It’s very exciting, both UK and Europe-wide there is a lot of great talent and entrepreneurial desire.’
For new entrepreneurs entering the market, Chesterman has some simple advice: ‘The most important thing is to not give up and really believe in what they are doing.
‘Entrepreneurs have lots of opportunities to fall at various hurdles, such as struggling to raise funding, and things never really go to plan. But you have to be tenacious and stick with it, as the ones who do that are the most successful.’
For a man that has already made his mark on the food, entertainment and property sectors, it’s advice that should be heeded.