Exclusive: Durban venture capitalists buy Gumtree SA from eBay-linked Adevinta

Gumtree South Africa has been bought out by Durban-based Impresa Capital, which is led by tech entrepreneurs and venture capitalists Sean and Donovan Bergsma – the brothers behind the Ignition Group of companies.

The Bergsma brothers secured the prized digital platform – touted to be South Africa’s biggest online classified advertising and community website – for an undisclosed amount from Norway-based Adevinta.

One of the world’s largest online classifieds groups, Adevinta has American multinational eBay as its major shareholder.

In fact, Adevinta bought eBay’s online classified business (which included the Gumtree operations in SA, the UK, Australia and Mexico, as well as several other online classified businesses in other international markets) in a deal in July 2020 reportedly worth $9.2 billion (over R156 billion at the current exchange rate).

Coincidently, Amsterdam-based global tech investment giant Prosus (which is majority owned by Naspers and also has strong SA links) wanted to buy eBay’s online classified business at the time.

Prosus and Naspers, both of which are listed on the JSE, will no doubt be keeping an eye on the Bergsma brothers and Impresa Capital’s plans for Gumtree in SA.

Read:
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ebay nears deal to sell classified-ads unit to Norway’s Adevinta – WSJ

Since the eBay deal, Adevinta has been looking to sell its Gumtree operations in certain jurisdictions. The Bergsma brothers got wind that Gumtree South Africa was up for sale and sealed the deal with Adevinta this week.

Speaking exclusively to Moneyweb, Sean Bergsma, co-founder and CEO of Ignition, said that while he could not reveal the value of the acquisition, the deal is subject to final regulatory approvals from competition authorities.

He hinted that the fact the deal needs such approvals highlights its significance.

“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.

Ignition was founded by the Bergsma brothers in 2002, and according to its website the group is “now one of Africa’s largest investors in technology, media, telecommunications and financial services sectors”.

“With a staff complement of over 3 500 people based primarily in the South African region, we have a team of experts in the fields of data science, technology, digital marketing, e-commerce and sales,” its site notes.

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Bergsma said the deal involves the purchase of just Gumtree’s operation and brand in SA and well as an agreement that allows for the expansion of the brand into the rest of Africa.

“Gumtree South Africa has around 5 million visitors to its website each month, making it one of the top 10 websites in the country,” he added.

“We are really excited by this acquisition and plan to invest in growing the platform, which will include new innovations.

“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 acquistion of Gumtree South Africa, means the local operations will be back in the hands of South African owners.”

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According to Bergsma, Gumtree’s local office is based in Cape Town with about 60 staff currently. However, expansion plans and new business opportunities linked to the online classified platform will see further jobs being created.

Claire Cobbledick, head of Gumtree South Africa, comments that as a community-based marketplace, local expertise and knowledge presents a strategic advantage.

“And so being acquired by a South African investor is an important and exciting next step for the Gumtree SA business,” she says. “We look forward to unlocking synergies within the Ignition Group businesses and network.”