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Meet the man who became Singapore's guru of property by accident
[SINGAPORE] Steve Melhuish knew practically nothing about the real estate market in Singapore when the condo he was renting was put up for sale in 2006. Now he dominates the industry.
The British-born Melhuish and his wife had just moved to the city-state 18 months earlier and they were surprised at how difficult it was to find new housing. Decade-old sites like Realtor.com, popular in the US, hadn't reached Southeast Asia, and most real estate advertising still appeared in newspapers with only basic information like price and a building name.
He founded PropertyGuru Group in 2007 to let people search more efficiently online and now controls the largest Internet real estate website in the region with 14 million users a month.
Mr Melhuish, 47, raised S$175 million from investors including TPG Capital and Indonesia's Emtek Group for expansion, the second-largest amount by a tech company in Southeast Asia last year.
Still, PropertyGuru faces challenges to its position as one of the region's hottest startups from giants such as Rupert Murdoch's News Corp and newcomer 99.co, backed by Facebook Inc co-founder Eduardo Saverin and Sequoia Capital.
"We typically have one or two new competitors every year, it keeps us on our toes," Melhuish said.
PropertyGuru's website lets users search for properties based on location, type and price, and see photos of interiors along with floor plans. They save time compared with the traditional approach of newspapers and agents, and often save money because they can more easily sift through many options.
PropertyGuru makes money by charging agents a fee to use its platform and by selling advertising online and in printed newsletters. In Singapore, the startup holds about 90 per cent of the market, more than the next four rivals combined.
"PropertyGuru has become a common portal to go to for anyone searching for a property to buy or rent," said Ong Teck Hui, National Director of Research at property broker Jones Lang LaSalle Inc in Singapore. "They have managed to create a brand a bit like Coke when you want to drink. When you want to find a property, you go to PropertyGuru."
Mr Melhuish has taken versions of the site and applications into Indonesia, Malaysia and Thailand, which along with Singapore represent a US$140 billion annual market for property transactions. Last month, PropertyGuru agreed to buy Ensign Media in its largest deal yet, adding magazines and websites about luxury properties and architectural content.
"We want to build depth and strength in existing markets," Mr Melhuish said. "Being a strong integrated player in the marketplace is very important."
PropertyGuru's fundraising last year was the largest amount in the region after ride-hailing service GrabTaxi Holdings Pte, the rival to Uber Technologies Inc. in Southeast Asia. Mr Melhuish declined to discuss PropertyGuru's valuation and said he has no immediate plans for an IPO now that he has additional capital.
Mr Melhuish credits the company's growth to paranoia, as numerous rivals have emerged and disappeared in the past eight years. Two months before he teamed with partner Jani Rautiainen to start PropertyGuru, three competitors entered the market, including iProperty Group. In November, iProperty agreed to be bought by REA Group Ltd, a News Corp unit which owns real estate websites in Australia, China and Europe.
PropertyGuru also competes with startups and even banks. With an Airbnb-like interface, 99.co, founded by Singapore entrepreneur Darius Cheung, aims to appeal to users who want an easy-to-use search experience. DBS Group Holdings Ltd, Southeast Asia's largest lender, has developed an app that helps customers buy a home by listing past transactions and providing a mortgage calculator.
Mr Cheung, 35, said the real difference between 99.co and PropertyGuru is "under the hood."
Traditionally, property websites are about whoever pays more gets listed on top. "This is why you get wrong data sometimes and this is a problem I wanted to fix," Mr Cheung said. His two-year-old startup takes a "Google approach" of relevant search, where marketers of properties only pay when somebody actually makes an inquiry about the property. "That makes people want to put more accurate, quality information."
Mr Melhuish said PropertyGuru has adopted a similar approach with higher quality agent listings ranked higher, regardless of whether they pay or not.
To keep up with the consumer shift to mobile phones and tablet computers, PropertyGuru has started 15 mobile apps in Southeast Asia for consumers and agents in the four countries, doing everything from allowing prospective buyers to search for property "near here" and enabling agents to upload listings.
Unlike many entrepreneurs who are inspired to create businesses to pursue a dream, Mr Melhuish only became a devotee of real estate after he took the plunge into his startup.
"Many people think that you need to be passionate to start a business, but I was clueless," he said. "My two pieces of advice for wannabe entrepreneurs is choose a large market and an industry that you'll become passionate about."