This week saw GCap Media, the company behind Capital Radio, XFM and Classic FM, acquiring a majority stake in local listings website welovelocal.
GCap acquired its stake for a fee of £450,000, with a further £150,000 to be paid if the business meets performance targets.
welovelocal was launched in June last year by brothers Max and Duncan Jennings. It combines local business listings with user reviews and ratings and a social network element, whereby local users can get in touch with each other.
We talked to co-founder Max Jennings about the deal:
What made you sell a majority stake in the site so soon after launching?
From launch, we were reassured by the early traction and press attention that welovelocal.com received, and were very happy with how the site evolved during the first few months.
We had received some great user feedback and a great team working on the site. We always knew, however, that getting a big media partner on board would be essential to increase the reach of the site, we just didn’t expect to get involved with one so soon.
After initial talks with GCap we became confident that the site could really flourish working with their team and leveraging their local reach. Working with GCap we will have access to GCap’s millions of listeners which presents a unique opportunity to reach out to new potential users and grow a critical mass of local business reviews and recommendations that will set us apart from our competitors and ultimately make welovelocal.com a more useful place to find the local businesses.
More broadly, we were very impressed with GCap’s ambitions within the digital sector and the team that we will be working with as the site continues to evolve.
Why GCap? Had you had any other offers?
We had interest from a broad range of media companies. Local is very hot at the moment – everyone’s jostling for a premium property in this space as local search continues to grow.
From those interested parties GCap offered a truly local reach through their 40+ radio stations which will be vital to cementing welovelocal.com’s future success.
What will GCap do for welovelocal?
In simplest terms, GCap will be able to increase the reach of the site, generating a greater number of local reviews, and ultimately increase the exposure for our advertisers.
The cross-over potential from the radio to web and vice-versa is particularly exciting. Through on-air features and promotions we hope to create a feedback loop from the radio to welovelocal.com and back again.
You can imagine the situation: It’s a slow day in the office, and over the radio you hear the conversation turns to the best place to get a curry in town with a call for people to send in their recommendations via welovelocal.com.
It’s not a lot to ask of the listener, and has the potential to generate an enormous amount of great content which will improve the overall value of the site for all users.
Are you expecting to expand the amount of ad revenue from the site?
GCap have extensive relationships with local advertisers which will prove invaluable. We’re going to begin enhancing the tools available to local businesses on welovelocal.com and being able to tap into GCap’s resources to help push these services out to the SME community will be of tremendous help in growing the sites ad revenue.
How were you doing in terms of growth and user numbers before the deal?
welovelocal.com has enjoyed accelerated growth particularly since our nationwide launch in December. Our traffic had more than doubled, we were seeing healthy user uptake, and the number of reviews that were coming in was really positive.