Contxto – “If you can’t beat ‘em, buy ‘em.” And that’s just what marketplace OLX Group did in Brazil this week. It’s bought out its competitor, Brazilian proptech Grupo ZAP at the pretty price tag of R$2.9 billion (US$642 million).
The only matter that’s pending is approval from the Brazilian government’s antitrust agency, the CADE.
If the agreement moves forward, it will position OLX’s Brazil branch as one of the largest real estate advertising platforms in the country.
Grupo ZAP and the real estate scene in Brazil
Brazil’s Grupo ZAP came to be around two years ago. The company itself was born as the byproduct of multiple firms, especially real estate portals, merging and/or being acquired to become Grupo ZAP.
That conveyed the benefit of having multiple brands under its belt. One example is dataZAP, an intelligence tool for decision-making in real estate. But above all else, it became a behemoth in hosting over 8 million properties.
While it’s debatable whether GrupoZAP is a startup, no doubt in sheer database power it’s a serious contender. And the numbers don’t lie.
According to a press release, in 2018, it had net revenues for R$217 million and an average of 28 million visits per month in 2019.
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Room to grow in real estate
From my standpoint, thus far in 2020, proptechs have been quite a hit among investors, especially in Brazil.
But what’s interesting to note is that despite all these innovations, there’s still a lot of room to grow within the country.
And Norwegian firm Adevinta, one of the co-owners of OLX, is ogling at all the possibilities.
“The large Brazilian real estate market has low penetration of online listings and is poised for a migration to digital,” said Rolv Erik Ryssdal, CEO of Adevinta. “I am delighted to see OLX Brazil strengthening its position in the real estate vertical in order to capture part of the upcoming growth potential.”
So perhaps there’s still plenty of breathing room for proptechs to compete in Brazil. But that’s no excuse to let your guard down.
Everything is moving at a fast clip, even for the traditionally slow real estate lifecycle.
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