Online estate agents Emoov and Tepilo are entering into a £100m merger, teaming up to create the second largest player in the digital market behind industry leader Purplebricks.

The pair said they were also incorporating online letting agency Urban.co.uk and had entered into a deal with Channel 4's Commercial Growth Fund to launch a major TV advertising campaign.

Under this deal, Channel 4 will take a stake in Emoov in return for airtime on its channels, although the size of that stake was not disclosed.

Emoov said the three businesses, which had a value of £89m, had secured £15m in new investment from existing and new shareholders, which included Channel 4 and publisher Northern & Shell.

Russell Quirk, Emoov chief executive, said the company was seeking to "further dominate the estate agency industry", with funds to be used to grow operations.

Although reports earlier this year had suggested that the combined business may seek to float this autumn, sources close to the company said that, while this continued to be an ambition, it was neither on or off the table at the moment.