• Overall company revenue was €73.4 million, down 1.5% year-on-year.
• Adjusted operating profit was €20.5 million, up 6.2%.
• Revenue from Alma Media's housing marketplaces was down 6.5% to €4.5 million.

Alma Media owns and operates Finland's leading real estate portal Etuovi as well as the country's largest rentals marketplace Vuokraovi. The company also operates several leading online classifieds assets across its home market (autos marketplaces Nettiauto, Autotalli.com and Alma Talent and Jobly.fi in recruitment) as well as Eastern Europe (including Prace.cz in the Czech Republic and Profesia.sk in Slovakia).

A company press release quoted the Central Federation of Finnish Real Estate Agencies in saying that 2023 is expected to be the weakest year for a long time for the housing market with only 3,822 transactions having been reported so far.

Those market conditions affected the company's earnings from its real estate portals with revenue from Alma Media's Finnish property portals falling 6.5% compared to Q3 of 2022.

Searches on the portal were down 11.5% however email alert signups were up 8.2% a figure the company says shows pent-up market demand while the volume of sale listings were up 5.7% with rental listings up 18.6%.

Goldman Sachs and Apollo Global Management Inc. are working with a group of four other companies—including U.S. lenders Sixth Street, HPS Investment Partners and ICG Capital—to prepare the loan that will reportedly be used by the Permira and Blackstone consortium to buy out Adevinta.

Bloomberg noted that the deal would be Europe's largest-ever direct lending deal.

The Adevinta takeover story, which became public in September, represents what appears to be the first step of an influx of American investment in the multi-trillion European real estate industry.

Europe's online classifieds industry is looking increasingly attractive for U.S. companies. Should the takeover go ahead it would represent the second large deal made for U.S. money to take over European portals in a short space of time.

Breaking news today confirmed that US-based CoStar is set to acquire British number three portal OnTheMarket for a reported $100M—a matter of weeks after CEO Andy Florance told the Property Portal Watch conference that he was eyeing up an overly fragmented European market.

CoStar's bid of 110p per share represents a premium of 56% to OnTheMarket’s last closing price and 93% to the three-month volume-weighted average price. The acquisition is expected to close in the fourth quarter of 2023 pending shareholder approval with OnTheMarket's Board having already expressed unanimous support.

Rumours of the takeover began to circulate in British media outlets late yesterday and were confirmed this morning via press releases issued by the two companies. The news follows CoStar founder and CEO, Andy Florance's candid admission at the recent Property Portal Watch conference that his company was coming to Europe with a $9 billion M&A "war chest".

Speaking of the acquisition, Florance said:

“We believe the acquisition of OnTheMarket represents an attractive and efficient entry point into the £8 trillion United Kingdom residential property market. We are excited to welcome the OnTheMarket team to the CoStar Group family.”

“OnTheMarket’s network of property professionals and breadth of advertiser relationships provide a strong foundation to compete with the dominant United Kingdom property portals,” continued Florance.

“The combination of OnTheMarket’s large network of agents and access to listings, together with the marketplace experience and resources of CoStar Group, has the potential to create the leading agent-friendly player in the UK residential marketplace. We see OnTheMarket as an important step in expanding our Homes.com residential network not only in the UK, but across Europe. We believe the market opportunity in Europe is over $10 billion, and we intend to participate aggressively in developing and expanding our residential marketplace network.”

As Florance highlighted in an on-stage interview with Online Marketplaces Chairman Simon Baker recently, CoStar has a track record of taking minor players and spending its way to market leadership. The company took Apartments.com from a minor player in the U.S. rentals market to an undisputed market leader and is in the process of turning Homes.com into a viable challenger to Zillow in the residential sales market.

The S&P 500 company has a phenomenal record of growth and clearly sees European expansion as part of its next phase.

A press release said that as the owner of OnTheMarket, CoStar would commit to spending £46.5 million on sales and marketing in the first full year "as the first stage of a multi-year investment programme totalling hundreds of millions of pounds". The intent to take on Rightmove was left in no doubt with the press release name-checking the dominant British portal saying that the figure was three times the current annual marketing spend of OnTheMarket's big green rival.

OnTheMarket's CEO, Jason Tebb referenced the increased budget set to be at his disposal in his comments:

“From a position of strength, partnering with CoStar Group will significantly accelerate our strategy with the clear target of becoming the market leader, whilst staying committed to fair and sustainable pricing. CoStar Group will bring industry-leading global expertise and significant financial firepower to invest in OnTheMarket, allowing us to accelerate our transformation of the sector. We have strong shared values in our commitment to agents who we believe will benefit from unparalleled value and greater opportunities to enhance their businesses.”

The takeover looks set to revive OnTheMarket after a slightly rocky period. Founded by agents in 2013, OnTheMarket failed to live up to expectations largely thanks to the controversial 'one other portal rule' and some questionable PR from its management. The portal looked to have found the right path under former agent Tebb's leadership which began in late 2020.

The majority agent-owned enterprise made a small net profit in 2020 and has been close to breaking even since then. However, despite increasing revenue and ARPA the company's latest missive to the market in July had some industry commentators worried about the falling number of agents listing on OnTheMarket.

But this bootstrapped startup based out of Hungary—operating with just six people—is about to land in the US, with a New York launch in two weeks and a nationwide rollout by the end of November.

Not bad for a business that only launched its private beta less than one month ago.

Propertizer caught our attention on its way to winning the Pitch Club competition at the Property Portal Watch conference in Madrid in October 2023, beating 12 other entrants from around the proptech and portal world.

I spoke with Peter Orban (CEO) and Daniel Kovari (CBO) after they picked up the trophy.

Pictured is Daniel with Pitch Club judge and iovox CEO, Ryan Gallagher

What does Propertizer do?

Peter: Propertizer tells you how much money you can make from any property, whether you're renting it, flipping it, or investing in it in the long term. We make money by selling our API to property portals.

When did the business launch?

Peter: We're quite young. We launched our private beta in September and we are closing very soon.

We're only in Hungary for now but in two weeks we are launching in New York, and in one month we launch to the whole of the US, so it has been a very fast journey for us.

How is the business funded?

Peter: We're a bootstrapped business. We fundraise in 2024.

What are you looking for from an investment?

Peter: Good question. Not just funds, but we're looking for connections across the whole industry so we can grow our knowledge of real estate globally.

Daniel: If we can get our foot in the door with the help of an investor, having a strong partnership like that would be the perfect fundraiser for us.

Which markets are you looking at?

Peter: Good question. It depends on the partners, but we're looking primarily at the US, European and LATAM markets—in this order.

Where did the idea for the business come from?

Daniel: We were friends before the launch. Peter built the first FSBO (for sale, by owner) hybrid model agency in Hungary that gathered a lot of key customer feedback from agents and mom-and-pop users. Meanwhile, I was working in mergers and acquisitions on the transaction side of commercial real estate.

I was trying to find an investment property in Hungary and I was shocked at how much information was missing for me to make a sound decision about where to buy and why. There was nowhere for me to go, nowhere.

When I thought about it, I realised that if it is difficult for me—with a professional background in finance—to find what I need before I purchase a property, then how can a regular buyer possibly understand the financial value of a property?

Once we realised that Peter's technological and business background—and my financial and investment background—were perfectly aligned for us to build on each other's knowledge, the idea for the business became much more complete.

We started development in October 2022, and one year later we are ready to roll out across the US.

What makes you think you won Pitch Club?

Daniel: I would love to know what the judges thought and why they felt that way about Propertizer, it would be great feedback.

I believe what makes us stand out is our authenticity and the simplicity of the product itself. Peter has coded products and built businesses for the past ten years so we were able to pitch the idea in quite a simple, straightforward way.

Obviously, the backend is the most complicated part, but the way our core business works is incredibly intuitive, to the point where even people with no financial background can understand the value of the information our product gives them.

Peter: The idea of simplicity is key. The product is simple, which means the pitch was simple, and it resonates with audiences because anyone can understand it.

How will AI impact the industry?

Peter: A super cool question.

AI will definitely change the market. Not with big things, but with small things.

AI will allow the industry to optimize processes but not change the landscape of how real estate technology works.

In Hungary, our real estate market has a big problem because we don't have locations for properties. With AI, we can extract location data from the text of the property description and so on. I think this is the direction of the AI for real estate companies.

However, I doubt AI will change the way we search for or sell property in the next 10 years.

What does 2024 look like for Propertizer?

Daniel: We can't mention the names of the countries and the companies we are talking to but we are finalising discussions with a few portals.

It's going to be all about expanding into other markets. We're live in Budapest, New York is coming soon, and then the whole of the US. That will definitely be our focus market next year.

We don't just want to penetrate the market, we want to build knowledge in the user base and teach people how our tech can be used in a way that is really, genuinely beneficial for them.

What will Propertizer look like in five years' time?

Peter: Our five-year timeframe is to work directly with the biggest real estate portals globally to provide them with real data not just for investors, but for visitors.

We'll also have a standalone portal—and that's how it will be!

Tell us about your experience at Property Portal Watch.

Daniel: We've been to other conferences before but the sheer amount of useful information that we've received is just astounding.

A particular highlight was Dubizzle Group talking about how they used SEO to dominate Google, and we'd never heard anything like that in our lives.

It's our first time here, and we've really enjoyed it. We've learned a lot compared to other conferences, and the networking opportunities here are just out of this world.

We'll for sure be back again and we'll hopefully make it for the LATAM conference in 2024.

Founded in 2021, Homevest was born out of the founders' experiences as expats living in London during the pandemic. Petru Dimulescu, co-founder, and CTO of Homevest, candidly shared, "Navigating the intricacies of securing the best deals with banks was an arduous process, and we want Homevest to be the solution."

Homevest has strategically partnered with some of Spain's foremost banks, including Santander, Sabadell, UCI, Unicaja, CaixaBank, and Cajasur, to offer non-resident property buyers a wide array of mortgage options. Their platform simplifies the application process, enabling applicants to interact with multiple banks competing for their business, ensuring highly competitive mortgage deals.

Maria Teresa Moreno Sánchez from Banco Sabadell expressed her satisfaction with the collaboration between Homevest and Hoteland, appreciating Homevest's innovative product.

"We jointly manage their mortgages, offering terms similar to residents, quickly and efficiently every day," she added.

The proptech startup's data indicates that Spanish banks on their platform are indeed offering competitive mortgage rates, closely resembling those available to local customers. Erik Edin, co-founder and CEO of Homevest, outlined his vision, stating,

"I'm convinced that mortgage financing can be made more accessible, and we are working tirelessly to make this vision a reality across Europe. We are already pushing Spanish banks to compete vigorously for non-resident business."

Homevest's data highlights a significant decrease in fixed-rate mortgage deals, with margins on variable rate mortgages falling below 1% this summer. Despite the European Central Bank's adjustments leading to increasing interest rates, non-residents using the Homevest platform in August secured variable rate mortgages as low as 5.00% effective rate and fixed-rate deals as low as 3.06%.

Since its inception in 2021 by ex-Wise employees Erik Edin and Petru Dimulescu, Homevest has started working with over 15 European banks and established partnerships with prominent property portals such as Immoscout24 in Germany, imobiliare.ro in Romania, and Hemnet in Sweden.

Homevest's vision extends beyond simply facilitating better deals; the company is on a mission to foster competitiveness and integration across Europe's fragmented mortgage markets. Despite the European Union's efforts to create a unified product market, financial services remain notably segmented. Homevest aims to bridge this gap and create a more accessible mortgage landscape for all.

The hefty bill comes as a result of the French government's so-called GAFA/GAFAM tax introduced in 2019 which was designed to make big digital services companies such Google, Amazon and others pay their fair share. The tax specifically targets companies that have global revenues of over €750 million and French revenues of over €25 million in any of the categories below:

• online advertising
• selling user data for advertising purposes
• online intermediation

As part of Adevinta, which generated €1,644 million in revenue in FY22, Leboncoin is liable to pay 3% of its revenue to the French taxman.

Leboncoin is a marketplace that operates across many categories and is large enough to be considered a significant rival to France's leading real estate vertical, the AVIV Group-owned portal SeLoger.

The argument from Adevinta's side is that Leboncoin's business model doesn't fall within the tax law's remit as it doesn't monetise commission and most of its revenue comes from classified ads rather than any form of direct advertising.

Last year, Amazon's lawyers managed to successfully argue that the company should be exempt from the GAFA/GAFAM tax which led to an amendment closing other possible loopholes for crafty businesses.

Fotocasa has awarded the certification to 600 pre-selected agents to take part in an initial test of the "sello de calidad", which recognizes the best companies in the sector and the good work carried out by the real estate agencies that have obtained it.

The seal exists to reassure buyers and sellers whether a particular agent is trusted by the portal—and is only given to agencies that pass a thorough selection process driven by Fotocasa.

The qualification process requires employees and real estate advisors to complete specialized courses on the workings of the real estate market, ensuring they are up to date with the latest trends and regulations, thus offering high-quality service and expert advice to clients—while a code of ethics must also be signed.

The seal is renewed annually, thereby requiring recipients

Pere Quintana, Marketing Director at Fotocasa, said:

"At Fotocasa, one of our great challenges has always been to help the real estate sector become professional.

"After the consolidation of initiatives such as the Fotocasa Pro Academy, where more than 20,000 real estate agents are trained annually, we promoted the creation of this Fotocasa Quality Seal , which recognizes those who do excellent work. Thus, in addition, we help our users identify trusted real estate agencies." [translated from Spanish]

It has been a year of innovation for Adevinta-owned Fotocasa. In March, the company introduced a landlord insurance product via a partnership with Grupo Mutua as well as adding a customer-focused "save your favourites" option to its app and website.

Fotocasa is Spain's number two portal, behind dominant market leader Idealista:

In an on-stage chat with Online Marketplaces Founder, Simon Baker at the Property Portal Watch (PPW) conference in Madrid, Florance outlined his plans to invest a chunk of his "$9 billion war chest" into European portals and technology.

And, in an off-stage exclusive interview with Online Marketplaces, Florance said that a number of residential portals are on Costar's radar.

"We are interested in putting a bigger percentage of our investments into Europe. The space is moving very quickly.

"It's a good time to start looking at European options. There is a great big game of musical chairs going on in Europe, and people don't know it. I've seen this before in the United States three or four times.

"I think the music will stop within two years. There will be winners and losers. Time is of the essence."

Florance told Baker that he expects a mass consolidation across major markets in Europe and around the world and even hinted that he is looking at "the number one, two, and three" portals across Europe as he explores investment opportunities—as well as smaller players if the growth potential is there.

"There will be a couple of shakeups, a couple of rude awakenings. How people perceive the number one portal, the number two, three or even four portal in a country can change very quickly. Things will change rapidly over the next three to five years."

When asked if CoStar was on the lookout for more than one acquisition, Florance's brevity said it all: "For us? Oh, for sure."

Florance went on to describe how the European market has been falsely split into individual countries, with too many players operating within one country but too few effectively operating internationally:

"I do not see a world going forward where we have one portal in this country, one in the next country, one in the next country and so on.

"The European market is being driven by financial engineering that focuses on making decisions quarter to quarter or via investment cycles that hand over assets from one private equity fund to the next until they take it public.

"I can see two or three portals operating in a dozen to three dozen countries."

We asked if there was anything Florance would like to publicise, and only then did the shields go up:

"I wouldn't respect you as a reporter if you didn't ask, but I wouldn't respect myself as a CEO if I answered!"

Make no mistake—CoStar is coming to Europe, and soon.

The vastness of Costar's budget for mergers and acquisitions is no joke—Costar pulled out of a $3 billion deal to acquire Realtor.com in February 2023, and Florance was quick to highlight that the cancelled merger represented just one-third of Costar's buying power.

It appears that Florance's appearance at Property Portal Watch is part of a bigger vision to retarget the Group's funds into increasing its footprint in Europe, which currently includes the Spanish commercial portal Belbex, Loopnet in the UK, Bureaux Locaux in France and Germany-based real estate data company Thomas Daily.

In a wide-ranging conversation, Florance also shared insights on topics including building Jeff Bezos' first computer, Costar's partnership with MIT, the value of AI in real estate, and Costar's high-octane rivalry with Zillow.

The committee will represent Adevinta in all aspects relating to the proposal submitted by a consortium led by major shareholders Permira and Blackstone—whose board representatives will not be involved.

Meanwhile, Citigroup Global Markets Europe AG and JPMorgan Securities Plc have been engaged as financial advisers, while BAHR, Cleary Gottlieb and Skadden are acting as legal advisors.

A stock exchange update says that "the independent committee is actively engaging in the proposal in line with applicable regulations and corporate governance principles."

The non-binding offer is for circa $4.2Bn and the company is in no rush to make an official decision.

But two minor shareholders have already spoken out against other, bigger shareholders for their supposed willingness to accept the takeover bid, which they say will limit the selling price if a deal does go through.

Francisco Sierra, the company’s general manager for Southern Europe, told Spanish outlet Ejeprime that "now is not the time" for iBuying, with Casavo taking the big decision to stop buying properties for now.

The company will instead focus its efforts on its mortgage intermediation product, which launched in June of this year. When reached for comment, Casavo CEO, Giorgio Tinacci said:

"Casavo’s long term strategy has always been to build an integrated end-to-end marketplace matching supply and demand in a seamless way; we have  leveraged the iBuying service as a starting point to bring liquidity to home-sellers. The current macroeconomic conditions have accelerated a transition to an asset-light business model that started over two years ago.

We aim at keeping an 'immediate liquidity proposition' within our platform offer, but, given the market volatility and high interest rate, we have to ensure that such service is delivered in a financially sustainable way in the current environment. For this reason, we are currently focused on reducing the inventory exposure of our iBuyer service while delivering a superior customer experience with our Marketplace offer"

Casavo says it has completed 4,000 operations, including 1,000 in Spain, since launch—with the average time for Spain-based to complete the application process taking just 30 days, half the national average.

It's not been an easy 12 months for Casavo.

Despite raising €400M in a 2022 Series D funding round (and €200M in its Series C round in 2021), a  €100M expansion to Portugal was abandoned after just one year, with job cuts equal to 30% of the iBuyer's total workforce this February 2023.

Indeed, it prompted CEO Giorgio Tinacci to pen and publish an open letter to all Casavo employees—with a specific mention of difficult market conditions as a defining factor in the company's obligation to streamline its operations.

The question is, if a well-funded, international iBuyer—the face of iBuying in Europe, no less—feels obligated to capsize its own business model, what does the future hold for other iBuyers struggling with similar market conditions?

We have reached out to Casavo for comment and will update this article if we receive a response.