OnTheMarket raises less than anticipated as valuation cut
The estate agent-backed site announced last month plans to float on London’s AIM market.
Property portal OnTheMarket has raised a less than expected £30 million ahead of its stock market flotation next month following concerns over its ability to challenge online rivals.
The estate agent-backed site announced plans last month to float on London’s AIM market in a bid to raise £50 million, which would value the group between £200 million and £250 million.
However, on Friday the group’s owner, Agents’ Mutual, said that it had raised just £30 million, valuing the group at £100 million.
The placing will see OnTheMarket offload shares at 165p per share when it lists on February 9.
OnTheMarket said its main aim is to “disrupt” what it called the duopoly of rivals Rightmove and Zoopla by offering a “premier search experience” to consumers whilst charging fair prices to agents.
However, some analysts have expressed doubts over its ability to do so.
George Salmon, an equity analyst at Hargreaves Lansdown, has said: “Backed by estate agents themselves, the launch of OnTheMarket in 2015 was meant to disrupt the duopoly of Rightmove and Zoopla. The group is now the UK’s third biggest portal, but all this really means is that it’s first among the also-rans.
“The challenge of toppling Rightmove remains a significant one.”
The IPO comes as the UK property market cools considerably as Brexit, political uncertainty and soaring inflation conspire to dent affordability and demand.
Money raised from the IPO will be used to lift OnTheMarket’s profile through marketing campaigns, as well as to expand group sales, customer relations and tech development.
The portal will have over 5,500 branches representing around a third of the total UK residential property listings at the time of admission to AIM, the company said.
Boss Ian Springett said: “We are pleased to have secured the backing of such a high quality investor base.
“We believe that the new capital, together with our ongoing revenues, will support our strategy to build a strong agent-backed challenger to the incumbent portals.
“The IPO will enable us to implement our marketing plans to build brand awareness and portal usage as well as to invest to scale up the supporting organisation and infrastructure to the benefit of consumers, agents and investors.”