Leading PropTech guru Mike DelPrete has revealed that he was involved in Purplebricks’ latest expansion, entering the Canadian agency market via the acquisition of an online listings platform.
Last week Purplebricks acquired DuProprio/ComFree, a fixed-fee and for-sale-by-owner platform in Canada for £29.3m.
With a model similar to Purplebricks, DuProprio lists over 40,000 properties each year, generates over $40m (Canada) in revenues, and has over 20 per cent market share in the Quebec province.
DelPrete - former head of strategy at the property portal Trade Me in New Zealand and now a respected international real estate consultant - played what he calls “a small part” in the deal.
But he insists that for any neutral observer, the deal was a successful one for the fast-growing hybrid agency, because from a revenue standpoint Canada immediately becomes Purplebricks' second-largest market behind the UK.
DelPrete claims Purplebricks acquired DuProprio at a bargain price, because the latter company was valued relatively lowly.
Therefore whilst set-up costs for Purplebricks in the US meant it spent £17.8m to generate £2m revenue so far, by using an acquisition to get into Canada it spend £29.3m to achieve a business with revenues of £23m. With Purplebricks anticipating growing in both markets - as well as in the UK and Australia - DelPrete says the DuProprio deal is a good value starting point.
He says that with new ownership, “DuProprio/ComFree is primed for growth” with Purplebricks ready to invest £15m additional funding into the business.
In a note to PropTech followers, he then says: “International expansion is a unique and key tenet of Purplebricks' strategy. No other company in this space (Opendoor, Redfin, Compass, Emoov, Yopa, and dozens of others) has expanded beyond one market. Purplebricks is now in four.”