Melbourne’s LK Group has entered the financial services industry with the acquisition of comparison site InfoChoice from iSelect.
LK has a diverse range of business activities. Founded by entrepreneur Larry Kestelman, who started the telco Dodo, its assets include the Brisbane Bullets and Melbourne United basketball teams, property developer LK Property Group, content provider Newsmodo, business outsourcing company Shore Solutions and human resources company Wall Street.
In a letter to business partners, InfoChoice chief executive Vadim Taube said the company’s executive management and team had “transitioned” with the change of ownership.
Banking Day reported last week that iSelect “has sold InfoChoice or it has a buyer”.
Taube said LK Group was making a strategic investment in the business, which will have a re-brand and re-launch in coming months.
“Our fresh initiatives include expanding our customer engagement and partner base, launching innovative digital tools and establishing new vertical,” he said.
The company claims more than one million visitors to its site each year and more than 3500 individual product comparisons from more than 160 providers.
iSelect acquired InfoChoice in 2011. Over the past year it has been tightening up on costs and operations after a major misstep in its marketing strategy.
It developed a campaign based on the idea that iSelect was not just a collection of comparison sites backed by telephone marketers but a “life admin store” and a “destination” for a wide range of consumer needs from superannuation to pet insurance.
An investor in iSelect, Forager Funds Management, said the campaign was “uninspiring and poorly executed” and led to underperformance.
A tricky part of the businesses of companies like iSelect is getting the cost of sales right, spending the right amount on marketing to drive traffic to its websites but not so much that thin margins are eroded. The company has acknowledged mistakes in this area.
In the wash-up, InfoChoice was surplus to requirements.