The Real Deal New York

Purplebricks revenue doubles as it eyes US market share

The discount resi brokerage launched in NY in April
By Meenal Vamburkar | July 05, 2018 12:16PM

Purplebricks’ CFO James Davies and USA CEO Eric Eckardt (Credit: Purplebricks and LinkedIn)

UPDATED, 2 p.m., July 5: Purplebricks doubled its overall revenue, as the discount residential brokerage eyes capturing more market share in the U.S.

Group revenue for the fiscal year 2018 ending in late April was $123.9 million, a 101 percent increase from $61.8 million year-over-year, the U.K.-based company reported Thursday. U.S. revenue accounted for $2.6 million.

Purplebricks said it continues to recruit agents in the U.S. Its footprint in California has expanded to Sacramento, Fresno and San Diego. The company is also in the New York market and, in June, launched in Arizona and Nevada. The company is also entering Canada with its recent $38 million acquisition of DuProprio/ComFree, a “commission-free” real estate company.

“Market share growth is a key objective within the U.S.,” CFO James Davies said on the earnings call.

The brokerage just launched in New York in April, arguing against consumers paying a 6 percent fee to sell their home. Purplebricks charges sellers in the U.S. a flat $3,200 fee. It moved up the New York launch after a $177 million equity investment from German media giant Axel Springer.

Founded in 2014, the company also has operations in Australia. Despite its rapid growth, Purplebricks has also faced controversy after investment bank Jefferies questioned its sales figures. It was fined nearly $16,000 in Australia for ads deemed to be misleading to consumers.

Discount brokerages such as Redfin and Purplebricks have sought to take on traditional firms like Corcoran Group and Douglas Elliman. On Jan. 2, Corcoran and Elliman combined had roughly $9.4 billion in listings volume, according to an analysis by The Real Deal. But no discount brokerage made the ranking.

Last summer, Redfin went public in a much-anticipated IPO — and the Seattle-based firm has been poured money into advertising and hiring agents.

In its earnings statement, Purplebricks acknowledged competition both from traditional real estate agents and its discount model peers. The company noted it “welcomes competition from other well managed hybrid competitors, which helps to raise the profile and attractiveness of the new model.”