The Swiss market is about to see a new marketplace giant. Switzerland-based marketplace operators TX Markets and Scout24 Schweiz are being merged in a joint venture company that is set to dominate the local classifieds ecosystem, and eventually lead to an IPO.
The move allows the new business to be better prepared to fight off the big tech giants, combine enough financial resources to stay competitive and innovative, and thus be in a better position to explore adjacent business models, particularly in real estate and autos.
In a statement today, the two companies announced the merger of their marketplace businesses, which span across real estate, automotive, general goods and various added-value products across finance, to create a single digital giant.
The merger brings Scout24’s two shareholders into the fold: media company Ringier (50%) and financial services provider Die Mobiliar (50%).
General Atlantic: A key knowledge partner
Also joining the venture is equity investor General Atlantic, adding its experience in running international marketplace ventures. The company has a majority shareholding in publicly listed Sweden-based real estate marketplace Hemnet, a share in China-based leading horizontal 58.Com and China-based real estate marketplace Fang, alongside a long history of classifieds investments.
General Atlantic brings a wealth of experience in real estate, particularly in new models. The company is an investor in tech-focused real estate businesses, such as the IBuyer business OpenDoor in the U.S. and rentals specialist QuintoAndar in Brazil.
As a first step, TX Group and Ringier and Mobiliar will bring their assets into the new venture, then TX will sell 10% of the business to General Atlantic.
“Our partnership with General Atlantic, La Mobilière and Ringier is the result of a long process. It represents a major step for all participants and demonstrates Switzerland’s positive digital outlook amongst increasing international competition. We strongly believe that this merger will strengthen our successful marketplace platforms and ensure further growth. Increasing our relevance to our users is key, and we believe the merger will immediately improve efficiency for our business customers. Together, we will also be able to expand investment in product development and increase our appeal as an employer,” Pietro Supino, chairman and publisher of the TX Group, stated in the announcement.
What will the new entity include?
The new group will have about 1,000 employes. TX markets and Scout24 have about the same number of employees today. The strategic goal behind the venture is to serve three groups better: users (new solutions, better search, transaction capabilities), customers and employees.
TX Group (formerly Tamedia) is adding the following marketplaces into the venture:
- Auction-based marketplace Ricardo.ch.
- The No. 1 real estate marketplace HomeGate.ch.
- The No. 1 general classifieds site Tutti.ch.
- The No. 2 auto marketplace CarForYou.ch.
Scout24 Schweiz is bringing:
- The No. 1 auto marketplace AutoScout24.ch, and its sister site MotoScout24.ch.
- The No. 2 real estate marketplace ImmoScout24.ch.
- The No. 2 general classifieds site Annibis.ch.
- Financial division FinanceScout24.ch.
There are no plans for merging any brands. All are growing and are expected to grow further.
Interestingly, the leading recruitment marketplace business in Switzerland — JobCloud — is not part of the joint venture. The business will remain independent in its existing form as a joint venture between Ringier and TX Markets.
No regulatory hurdles
No regulatory hurdles are anticipated, with the companies having discussed the venture with Switzerland’s competition authorities for several months. With four independent companies forming the JV, each will have 25% of the voting rights — a highly unusual arrangement, considering that it will not be reflective of the shareholding positions.
Together with the combined revenue not passing a threshold, the companies say there is no need to gain clearance from the competition authorities.
A desire to create so-called “national champions” may be an additional rationale for allowing the joint venture to go through. Swiss authorities may want to create scaled national entities that can compete with foreign tech giants like Facebook and Google, and are thus less worried about the resulting issues in letting local market leaders combine. The Swiss government similarly permitted the merger of two leading recruitment sites in 2013, Jobs.ch and JobUp, to create JobCloud.
This logic was underlined in today’s online presentation on the venture, with Marc Walder, Ringier CEO, stating that the new joint venture faces a lot of competition from big players and well-funded fintech and proptech businesses. “We need companies in Switzerland that can compete internationally,” he said.
In the presentation, Facebook was cited as the No. 1 general marketplace in Switzerland, though no concrete metrics are available to support this claim. There are also a number of large, well-funded companies present in real estate and adjacent financial services segments in Switzerland, which likely also helped remove any obstacles to the merger.
TX Group will hold a 31% economic interest in the new joint venture. Ringier and Die Mobiliar will each hold a 29.5% share. General Atlantic will have a 10% share. The new independent group will also pursue the medium-term goal of going public.
”Ringier, TX Group and La Mobilière have succeeded in merging their leading real estate, vehicle, finance and classifieds platforms. General Atlantic brings complementary qualities as a globally recognised, successful investor in the field of digital marketplaces. The result is a uniquely positioned company in Switzerland. With this group, we will significantly expand our customer focus across all business areas. We will meet our customers’ requirements even more effectively through targeted investment in innovative products and services. This shared vision is the driving force of all the shareholders,” Marc Walder, CEO of Ringier, said.
The joint venture is not closed yet, and it will take some weeks before the new company is launched officially. Once that is complete, the financials will be revealed.
”As the leading Swiss insurer, we seek solutions that enable us to strike the right long-term balance between the fast-paced world of digital services and our long-standing, successful presence with our local independent general agencies. Through our investment in Scout24 Schweiz five years ago, we gained important knowledge in developing and expanding our products and services for the residential sector and SMEs. So for us, it is logical that we are a part of this now and in future, as one of the leading digital Swiss marketplaces is created,” Michèle Rodoni, CEO of Die Mobiliar, stated.
The new team
The ambitious venture will be led by Gilles Despas, the current CEO of Scout24 Schweiz Group. He will be the JV’s CEO. Despas was previously chief digital officer and group chief marketing officer of Thomas Cook in London, and formerly served as MD and CEO of EBookers and HolidayCheck.
Lothar Lanz will serve as chairman of the board of directors. He is currently chairman of the supervisory board of Home24, deputy chairman of the supervisory board of TAG Immobilien AG, and a member of the supervisory board of Dermapharm SE.
Joining the board of directors are:
- Joern Nikolay, who leads General Atlantic’s business in Germany, Austria, and Switzerland as part of the EMEA team.
- Olivier Rihs, CEO of TX Markets.
- Michèle Rodoni, CEO of Die Mobiliar.
- Pietro Supino, chairman and publisher of TX Group.
- Marc Walder, CEO and managing partner of Ringier.