One of South Africa’s largest online marketplaces, Gumtree, has been acquired by Impresa Capital, a Durban, South Africa-based firm led by tech businessmen and venture capitalist brothers Sean and Donovan Bergsma, founded in 2002.
According to a report from MoneyWeb, the Bergsma brothers managed to secure Gumtree, a digital platform believed to be the country’s largest and most popular online classified advertising and community website, from Norway-based Adevinta for an undisclosed amount.
Gumtree Comes Home
The Adevinta group bought eBay’s online classified business in July 2020 for a reported amount of $9.2-billion. The deal included Gumtree operations in SA, the UK, Australia, and Mexico, as well as several other classified businesses across many international regions. Now it seems the Bergsma brothers have brought Gumtree’s SA operations back into South African hands.
The deal includes the purchase of Gumtree’s operation and brand in SA, as well as, most notably, an agreement that allows for the expansion of the brand in the rest of Africa.
“We are really excited by this acquisition and plan to invest in growing the platform, which will include new innovations,” said Sean Bergsma, co-founder, and CEO of Ignition Group.
“The deal has special significance for us as Gumtree was founded by South Africans out of London. It was then bought by eBay and then sold to Adevinta. However, our acquisition of Gumtree South Africa, means the local operations will be back in the hands of South African owners,” Bergsma added, quoted by MoneyWeb.
How the Deal Went Down
Apparently, Adevinta had been looking to sell its Gumtree operations in certain regions, with South Africa included, since the 2020 eBay deal came to fruition. When the Bergsma brothers became aware that Gumtree South Africa was for sale they moved to seal the deal, finalising only this week.
Currently, according to Bergsma, the deal is yet to have concluded the final steps in regulatory approvals from the relevant competition authorities, and thus he could not disclose any acquisition amounts.
The Bergsma brothers, hinted, however, that the fact the deal requires to be approved by the authorities means that the transaction was most likely for a “significant” amount.
“We are a private business, so don’t have to disclose the value of the deal. However, this is a major acquisition for Impresa Capital, which is our family office of sorts – housing investments like our majority shareholding in the Ignition Group of companies based in Durban and other investments,” said Bergsma.
The Future of Gumtree South Africa
With the purchase of the agreement to expand to other African countries, there is the potential that the Bergsma brothers would want to launch the marketplace in countries like Nigeria and Kenya but due to the large number of major classifieds platforms that already exist in these countries like Jiji and Jumia Classifieds, Gumtree my want to expand to smaller markets first like Ghana or Namibia.
It is clear that the Bergsma brothers want to continue to innovate with Gumtree and they want to grow the company. According to Bergsma, Gumtree’s operations in South Africa are currently headquartered in an office in Cape Town with around 60 staffers. With expansion plans underway, Gumtree is expected to create further jobs to fill in new positions in operations.
Claire Cobbledick, head of Gumtree South Africa chimed in that as a community-based marketplace platform, being purchased by local investors presented a strategic advantage due to local expertise and knowledge.
“And so being acquired by a South African investor is an important and exciting next step for the Gumtree SA business,” she told MoneyWeb.
“We look forward to unlocking synergies within the Ignition Group businesses and network.”
Compiled by Luis Monzon
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