PHOTO: REA GROUP
If anyone knows how to challenge the fortunes of online real estate giant Domain, it’s Andy Florance, the founder and CEO of US-based CoStar. With a $US32 billion property tech empire built from scratch, Florance is gearing up to give Domain’s main rival, REA Group, the fight of its life.
Florance, who relishes a corporate battle, expressed his disappointment last year at being denied the chance to “bankrupt” REA Group when his $12.3 billion takeover bid for the UK’s Rightmove fell through. In a move that echoes his UK strategy, CoStar acquired challenger brand OnTheMarket for £100 million in 2023, aiming to dethrone the market leader.
CoStar’s audacious raid on Domain and its major shareholder, Nine Entertainment, took place on Friday morning, with a subsequent buyout proposal. If the deal proceeds, Florance is well-positioned financially to aggressively pursue REA Group.
In the United States, CoStar has taken significant market share from Zillow through strategic acquisitions, such as Homes.com, which it bought for $US156 million in 2021. CoStar’s portfolio also includes LoopNet, Apartments.com, and
Florance’s classic Silicon Valley founder story began while studying at Princeton, where he started CoStar as a real estate data analytics platform. Over the years, CoStar has averaged two acquisitions annually, showing Florance’s knack for strategic growth.
His ambitious plans for Domain have been in the works for some time, and he spent the recent Christmas period in Australia, making key connections, including with former treasurer Joe Hockey. Should the buyout succeed, Domain’s staff may face a cultural shift under Florance’s exacting leadership.
Florance has developed a reputation for his unvarnished criticism and demanding standards, with past employees reporting instances of public shaming. In a particularly alarming incident, a former CoStar communications director claimed Florance pointed a semiautomatic pistol at a camera during a video meeting. CoStar denied these claims, highlighting Florance’s passion for firearm safety.
Florance’s approach has not been without controversy. Last year, accused a former employee of spying for CoStar, leading to a public dispute with CEO Damian Eales.
The outcome of Florance’s bold move to buy out Domain remains uncertain, but one thing is clear: REA Group is in for an intense battle if the acquisition goes through.
SOURCE: AFR