Vows to crush Rightmove
If we are a nation addicted to property porn, then Alex Chesterman is most definitely our ultimate porn star.
He’s the founder of property website Zoopla.co.uk, which hooks more than 15 million visitors every month who log on to buy, sell and eyeball Britain’s homes.
Launched in 2008, Zoopla produces over two million leads for estate agents a month and has become the UK’s second most visited property website after Rightmove.co.uk.
But Chesterman is in no mood to rest on his laurels.
In June, Zoopla merged with The Digital Property Group, the business behind FindaProperty.com and Primelocation.com, to become Zoopla Property Group. And as CEO of this new property giant, Chesterman is eager to topple his arch rival and UK’s number one property portal Rightmove.co.uk. He claims that the merger will drive atleast 30 million visitors to Zoopla’s websites every month.
He’s an experienced entrepreneur, having launched ventures to crack the London bagel market and DVD rentals.
“I love developing an idea from nothing,” says Chesterman. “What I’m good at and where I add value is in spotting a gap in the market or improving on something that already exists.”
(Yet, for such an accomplished entrepreneur, Chesterman is cagey on numbers and won’t divulge turnover and profit figures.)
But his story is gripping nonetheless. Back in 1990, after graduating from University College London, he turned his back on a plush bank job in London for a three-month stint managing the Hard Rock Cafe in Orlando, Florida.
Turned on to the restaurant business, Chesterman was in no mood to head back to the UK and went to Hard Rock’s rival, Planet Hollywood, in 1991 where he remained as executive vice president until 1998. It was family reasons that eventually brought him back home to London, but by now he’d become something of an American, with American tastes – for bagels. So, missing his daily bagel for breakfast dearly, he set up a chain of bagel bars in central London called Bagelmania. Itching to get into the online space, he sold off each of the bagel outlets one by one during 2003 and 2004.
In 2003, Chesterman launched online DVD rental company ScreenSelect with his friend William Reeve from Acton. Three years later, ScreenSelect merged with LoveFilm and Chesterman became one of the founders of Europe’s biggest DVD rental company.
“I was keeping an eye on Netflix’s growth in the US, they were on rising at the speed of light and I saw a serious business case there,” Chesterman recalls. “They were preparing for an IPO at that stage and consumers were hailing it as a revolutionary idea. I tried to think of all reasons why it wouldn’t work in the UK and couldn’t come up with any. So, William and I set up ScreenSelect.”
According to Chesterman, ScreenSelect hit the right note with customers and grew fast but there were a number of competitors emerging. One such player was LoveFilm.
So both companies went head to head and targeted larger shares in the market by acquiring smaller players. In 2005, LoveFilm took over DVD and video game rental chain Choices’ online business – getting one up on ScreenSelect in the process.
Not pulling any punches, ScreenSelect acquired another video rental player DVDs365 in the same year. Then they looked to Scandinavia – with ScreenSelect gobbling up Swedish-Norwegian company BraFilm, and LoveFilm taking over Swedish-Danish company Boxman.
Who won in the end? ScreenSelect. By 2006, Chesterman’s company had snowballed into the biggest player in the space with 200,000 customers while LoveFilm was stuck at 100,000 users.
“We had a bit of a rat race going on there because as an entrepreneur, I am very competitive. I will keep no stone unturned to be number one, we got into the space to win, not to be the number two player.”
To consolidate ScreenSelect’s number one position, in 2006 Chesterman decided to shake hands with LoveFilm and merge both businesses. While ScreenSelect’s management and technology platform survived, LoveFilm became the name of the brand.
Then, in 2011, Amazon acquired Lovefilm for £200m ($317m) and Chesterman is believed to have trousered a stonking windfall from the sale.
While Amazon might have bought Lovefilm in 2011, in reality Chesterman had actually left three years earlier, choosing property as his next target. But why foray into the property portal business when there are already such well-established players in the market?
“Of course there were big players in the market already, but as a consumer, I found it very frustrating that nobody was providing the ability to both search for properties and research the market. Back then, the internet had evolved but no property portal was using the internet to transform the online property experience.”
To address this problem, Chesterman with co-founder Simon Kain launched Zoopla in 2008 with plans for it to become the Google of property searches, building complex algorithms that valued each and every one of the 27 million residential properties in the country.
The business model of the website was simple: estate agents advertise on the site for a monthly fee.
To help him develop this new site and turn it into the Zoopla we know today, he turned to VCs and secured £3.75m of funding from Atlas Venture and Octopus Ventures in 2009. In 2010, another round of funding raised £3.25m. “I didn’t have a problem convincing the investors as they saw that Zoopla had the potential to make money. However, the second round of funding was conditional on proving that we can actually build the functionality to value every UK home. It was a Herculean task, but we managed to nail it.”
Ask him about scaling the business and Chesterman admits that Zoopla’s growth has not been entirely organic and it has grown both through word of mouth and a number of acquisitions.
One thing’s for certain, his appetite for acquisitions is ferocious. In July 2009, Zoopla snapped up Thinkproperty.com from the Guardian Media Group. Then, in the same year, it took over the PropertyFinder Group and its websites Propertyfinder.com, Hotproperty.co.uk and UKpropertyshop.co.uk.
In August 2010, Zoopla acquired property technology company, Byteplay Ltd followed by Houseprices.co.uk in 2011.
This year, Zoopla acquired UpMyStreet.co.uk and then merged with Digital Property Group, owner of PrimeLocation.com and FindaProperty.com.
But the big question remains: If News International (formerly co-owner of Property finder) and Guardian Media Group couldn’t beat property goliath Rightmove.co.uk – how will Zoopla move Rightmove off the top spot?
Chesterman believes Zoopla’s recent merger with Digital Property Group will help the site defeat Rightmove. “Our combined businesses will give us an enviable position in the property portal sector,” he says with confidence.
Can he do it? He’s certainly got a fair bit of ground to make up to catch Rightmove but he is well on his way.
“Like I said before, I’m looking to become the number one property website, come what may.”
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