Zoopla operates a matchmaking business model in the peer-to-peer real estate industry; it brings together potential buyers/renters – via their real estate agents - and sellers/lessors in need of locating their ideal property for purchase or rent. Zoopla connects this dyadic relationship by maintaining a website that allows the parties to find each other based on their preferences; the website does not interact or get involved in payments, but instead allows real estate agents (Realtors) to list properties on the website that now has global reach. Realtors provide property information to and from a very wider array of prospective buyers, sellers, lessors and lessees. Zoopla also provides optimization tools allowing the users to calculate mortgage rates and in turn provides realtors data on the penetration rate (hit rate) for the listings. Unlike traditional realtors, Zoopla scales not by increasing inventory but by growing the community of subscribers listing their properties and them with end users.
Zoopla Group, the mother company that created Zoopla.co.uk was founded in 2007 in London by Alex Chesterman. The founder solidified his reputation in the online arena following the sale of his first project Lovefilm, a DVD mail delivery company, for GBP 200 million. In 2008, the company received a round of funding from Venture Capital firms in London and Silicon Valley to create Zoopla.co.uk. The following years, the company emphasized acquisitions in order to take out out most of their competitors and consolidate this segment of the sector. Rightmove remains one of the few large competitors to date. Following additional rounds of funding which eventually arrived at GBP 3.25 Million in 2010, the company established a large user base which now exceeds 40 million per month across the world. In June 2014, Zoopla’s majority owners began to float the company on the London Stock Exchange (LSE) and the company now has a market capitilisation of GBP 877.99 Million.
CUSTOMERS – WHO THEY ARE:
Zoopla connects two groups of customers: Realtors looking to lease or sell their clients’ properties and individuals looking to buy or rent a property.
ENGAGEMENT – VALUE CREATION PROPOSITION:
Zoopla creates value for all parties in different ways.
For realtors: it gives them a way to reach a wider network in order to sell or lease their clients’ properties.
For buyer/renters: the primary benefit for end users is the ability to make selections from a wider portfolio of properties in a calculated and concise manner relative to their preferred location.
Zoopla takes a number of important measures which enable establishing trust between the parties, such as the identity and reliability of the listed agents. To use Zoopla, site visitors search for listings in their destination city. Once they have found a place, they can send a message to the real estate agent with any questions about the property or alternatively directly call the agent translating this into a lead.
DELIVERY – THE VALUE CHAIN:
Zoopla website provides a search engine, which matches customers to the respective property market, price ranges, sizes of the properties and locations. Both renters/buyers and lessors/sellers create an account with Zoopla and list their properties on the website, including photos and standard descriptions. These listings are vetted by Zoopla. Zoopla also actively develops partnerships with realtors in order to increase the number of listings available on its website.
MONETIZATION – VALUE CAPTURE:
Agents pay for the listing in full using a credit card. The company has now established corporate relations with major realtors and long term contracts are in place guaranteeing Zoopla’s business. The company has now launched a Pro application that allows subscribers to conduct data analytics in order to make better pricing decisions and evidently better calculated decisions for the end users. As Zoopla grows its brand name, it has now become the trusted website for peer to peer property connectivity. With 40 million users a month and increasing, the number and location of subscribers continues to expand allowing Zoopla to run on a 20% net profit margin.
Zoopla website: www.zoopla.co.uk
Zoopla Wikipedia entry: https://en.wikipedia.org/wiki/Zoopla
Written by Khalid Jishi and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016
Published 23 April 2016