Digital real estate advertising company REA Group, which is majority owned by News Corp and operates Realestate.com.au, has announced it will acquire Flatmates.com.au for $25 million in a bid to expand its offering into shared accommodation and go global.
The acquisition will be funded from cash reserves, with the potential for additional earn out payments across the next two years dependent on the financial performance of Flatmates.
Tracey Fellows, CEO of REA Group, said in a statement that the company wants to tap into the “enormous growth” of the sharing economy. Founded in 1990, Flatmates now reports receiving an average of 2.6 million visits and more than nine million flatmate searches monthly.
“The share accommodation segment is one of the fastest growing segments in the Australian property market with traffic across the sector growing at over 50 per cent year-on-year,” Fellows said.
“This acquisition allows us to play a more active role in helping consumers, regardless of what phase of the property lifecycle they are in, to find a home. Growth in the segment includes renters looking for flatmates, homeowners seeking to rent out a spare room, property investors hoping to maximise on their outlay; it includes people at almost every phase in the property cycle.”
Fellows added that with Flatmates already the number one player in share accommodation by both revenue and audience, REA Group will help accelerate that leadership position through the sharing of technology, expertise, and reach.
Thomas Clement and Andrew Maloney, cofounders of Flatmates, said in a joint statement that the acquisition is an “exciting and natural progression” for the company.
“Integration with traditional property sectors will not only enable us to provide an enhanced experience to our current audience but also to renters, homeowners, and property investors.”
The pair last year launched CasaStudent, a new platform aimed at helping international university students find suitable accommodation from trusted providers, in conjunction with StudentVIP.
The acquisition is just the latest move in what have been a busy few months for REA Group and parent company News Corp as they look to double down on the consumer appetite for everything property.
News Corp Australia last week invested in Plattar, a Melbourne-based startup that allows users to create and distribute augmented reality content. The investment is the first by News Corp Australia in a seed funding round, with the company stating that a collaboration between News and Plattar on a partnership with REA Group and Ray White in February confirmed the potential of the platform.
REA Group’s Realestate.com.au also recently partnered with 3D tour provider Scann3d to create walk through tours for off the plan properties.
Clement will continue on as CEO of Flatmates following the acquisition, which is expected to close in the coming weeks.
Image: Thomas Clement. Source: Supplied.