Fairfax Media’s Domain Group has acquired a 35 percent stake in Oneflare, an online marketplace for local services providers, for $15 million, valuing the startup at around $43 million. The startup last raised $3 million in July 2015.
Antony Catalano, CEO of Domain Group, which operates property listing website Domain.com.au, said the company is looking forward to pursuing the “significant opportunities and synergies” between the two businesses as they look to dominate Australia’s $100 billion local services market.
“Domain’s investment in Oneflare is part of our strategy to broaden our offering to consumers and agents across the property lifecycle, into home improvement and local trade services,” he said.
Adam Dong, founder and CEO of Oneflare, said the investment will deliver benefits for customers of both companies.
“The planned integration will allow Oneflare to help make moving house or renovating a new home much easier and more affordable for millions of Aussies, connecting them with skilled experts. The partnership will also allow us to provide our independently verified trade businesses with quality leads from Domain’s apps and platforms,” he said.
“Domain is a true leader in mobile product innovation and the investment and partnership will also accelerate our mobile-first strategy and continue to deliver a best-in-class product, sales, and support experience.”
Domain reports it has 4 million Australians using its apps and website to search for property monthly, while the Fairfax Media network itself reaches 13 million people each month.
The investment makes perfect sense for both Oneflare and Domain; their respective competitors hipages and News Corp property Realestate.com.au teamed up last year. News Corp acquired a 25 percent stake in the startup for a reported $40 million in December, putting its valuation at $160 million.
The reason why is easy to spot: Oneflare reports that it generated $450 million worth of jobs last year, with year-on-year growth of 160 percent across a number of home categories. It has 80,000 businesses registered across over 150 categories, going beyond the ‘tradie’ space to incorporate services such as photography, design, and accountancy. Hipages, on the other hand, has reported generating $1.35 billion worth of jobs annually.
The investments of both media companies in this space show they are eager to make up lost ground as revenue from their traditional properties continues to fall; the classifieds were one of the ‘rivers of gold’ of newspaper advertising until the internet took over.
Beyond just bringing back that revenue stream, potential integrations between the media companies and and the startups could be big moneymakers.
News Corp hinted at this potential in its Future Focused innovation showcase earlier this year, showing how its other assets such as DIAKRIT, which helps real estate agents and prospective home buyers visualise properties through 3D and rich media content, can work with hipages. For example, users thinking of renovating could receive quotes for a renovation through hipages directly from the VR experience.
Domain too has interesting things in the works, having hired a new head of product in March. The company stated that bringing on Asok Boopathy, who has held senior roles at BigCommerce and PayPal, reinforces its ‘startup-enterprise’ approach to technology and product development.
Image: Adam Dong. Source: Supplied.