Shomik Banerjee, CFA Poulami Bhattacharya Director
[email protected] +44(0) 7800 922132 Onthemarket.com (OTM) Investment Case OTM faces headwinds from reluctant vendors and low levels of audience traction, despite a strong start with 6,500 agencies signed up since launch in January 2015. The market however continues to be an attractive investment proposition that offers £19-35m a year in structural growth and where the leading players Rightmove and Zoopla enjoy 50%+ margins. Yet for OTM, comparatively low returns on marketing spend, especially in terms of leads; remain a key concern. Unless it can at least double its inventory of listings from current levels of 240,000 and increase marketing spend to build audience reach comparable to the incumbents, its long term sustainability across the UK will remain doubtful. Another key test is whether the business can continue to raise enough capital from its members to fund its growth. We expect OTM to become an acquisition target. 1 | P a g e Shomik Banerjee, CFA Poulami Bhattacharya Director
[email protected] +44(0) 7800 922132 Executive Summary In this report, we analysed OTM as a challenger in the digital classified property advertising marketplace. We started with a model to estimate the total addressable market size. We then looked at key factors that impact the market. This is followed by a study of the market structure and an in- depth analysis of OTM (based on information available). Finally, we concluded with a forecast that forms the basis of the investment case. Total Addressable Market Size We used a three stage top down model to estimate the total addressable market size for digital classified residential property advertising in the UK.