Scout24 activities: cars and real estate

Scout24 is best known for ImmobilienScout24, the leading property portals (real estate listings) in Germany, as well as for AutoScout24, car listings across Europe.

Scout24 company valuation: from €2 billion to €5 billion in 5 years

Back in 2013, Hellman & Friedman acquired 70% of Scout24 from Deutsche Telekom, in a deal which valued Scout24 at €2 billion.

How can Scout24 be worth so much more only 5 years later?

Is it because of an increase in revenues for Scout24?

In 2013, Scout24 reported €340 million in revenues, and an EBITDA at €91.6 million. Comparatively, in the first nine months of 2018, Scout24 Group revenues amounted to €385.8 million. This would project he yearly revenues at over €500 million, which is a 50% increase since 2013.

Revenues increased by 50%, while market cap doubled. So, can we entirely justify the increase in market cap of Scout24 to revenues? No.

Is it because of an increase in profitability for Scout24?

Indeed, the EBITDA margin of Scout24 has drastically increased over the past 5 years. From 29.7% in 2013, to 52.7% in 2017 (see graph here).

Is it because of an increased market potential value?

In 2018, Scout24 acquired, a German online loan comparison portal, for €285 million. « Between 2015 and 2022, the market share of consumer loans generated through online comparison platforms is expected to double. »

Indeed, online marketplaces such as Scout24 are currently expanding across the value chain. Indeed, in addition to advertising, these online marketplaces are developing other services a home (or car) seller or buyer might need. Loans? Insurances? Moving? Utilities? Valuation and data?

Is it because private equity firms have entered the game?

Silver Lake, a US private equity firm, bought the British company ZPG for €2.5 billion in 2018. Zoopla Property Group (ZPG) made £244.5m in revenues in 2017, with an adjusted EBITDA at £96.4m. Comparing with Scout24, ZPG was making approximately half of Scout24 revenues, and less than half of Scout24 revenues. So we could imagine why shareholders of Scout24 may consider that any decent offer for Scout24 should be above €5 billion, considering this comparison between ZPG and Scout24.

Last but not least: expanding across the value chain

One more interesting thing about ZPG (Zoopla Property Group) is that it has been among the first online marketplaces to diversify. Indeed, ZPG owns a suite of price comparison websites such as which can be used to compare loans, mortgages, credit cards, but also uSwitch, which can be used to compare gas, power and broadband prices. What’s more, ZPG acquired Calcasa, a property market data company based in the Netherlands.

Quite likely, private equity firms are keen on acquiring property portals, or online marketplaces such as ZPG or Scout24: a very healthy business that does not entirely rely on its advertisers, but that is adding value to both users and advertisers with new services that come to enrich the marketplace.

Whether you agree or disagree, feel free to send me a message to share your opinion! I’ll be happy to debate about innovation & real estate. Otherwise, feel free to consult some other articles by clicking here.