March 26 (Reuters) - Purplebricks Group Plc said on Monday German publisher Axel Springer has invested about 125 million pounds ($177.65 million) for a 11.5 percent stake in the British online real estate agent, which is looking to expand in the United States.
Shares in Purplebricks fell as much as 10 percent to 280 pence on the London Stock Exchange.
The company said Axel Springer’s investment, which included a 100 million pounds subscription for new shares, would also be used to enter new markets and widen Purplebricks’ service offering.
Purplebricks ventured into the United States last year - its third market after Britain and Australia - by launching operations in Los Angeles. In 2018, it moved into San Diego, Sacramento and Fresno.
The company said in January it planned to enter the New York market in the second quarter of fiscal 2018.
In Britain, Purplebricks and other online estate agents have challenged traditional operators such as Countrywide and Foxtons, which are struggling as the market cools due to uncertainties in the wake of Brexit.
However, Purplebricks warned its group revenues for the year ending April 30 would be around 5 percent lower than its consensus of 98 million pounds due to weak market conditions in the UK, which has been worsened by poor weather.
Both Australia and the United States are on course to at least meet its full-year revenue expectations, the company said.
$1 = 0.7036 pounds Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Arun Koyyur