German media company Axel Springer is purchasing tens of millions of shares of Purplebricks, more than doubling its stake in the beleaguered flat-fee brokerage from 12.4 percent to 26.6 percent.
Axel Springer announced the acquisition of 43.7 million Purplebricks shares Monday, saying it was making the investment because “the hybrid real estate agent model offers great potential.” The shares will be purchased from various Purplebricks’ founders for 1 pound each.
Berlin-based Axel Springer publishes a number of European newspapers and also owns U.S.-based website Business Insider and its offshoots. The company previously invested $177 million in Purplebricks, which was used to fund the brokerage’s expansion beyond its home base in the U.K.
Though Purplebricks — which charges U.S. home sellers $3,200 to list their properties — has generated a considerable amount of hype since its founding in 2014, it has since fallen on somewhat harder times.
Last month, the company announced that it was shuttering its Australia operations after two and a half years in the country. The firm also said it was reviewing its operations in the U.S., hinting that it may retreat there as well.
Purplebricks has also suffered from falling stock prices and departing executives, and has struggled to generate customers from its significant marketing efforts in the U.S. However, real estate strategist Mike DelPrete did note in April that Purplebricks’ U.K. business remains profitable.
Unsurprisingly, then, Axel Springer foregrounded Purplebricks U.K. business Monday.
“Purplebricks underlines the attractiveness of this model with its business in the U.K.,” the German firm said in its statement, “showing convincing revenue and profitable growth despite a challenging market environment.”
Somewhat cryptically, the statement also mentioned that Purplebricks operates in the U.S. “where it is exploring the opportunities that exist.”
Neither Axel Springer nor Purplebricks immediately responded to Inman’s request for comment.
However, the Financial Times noted Monday that Axel Springer’s new investment in the brokerage could “smooth the way for a potential takeover.”
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