PropertyGuru secures S$175m from 3 investors

Singapore

PROPERTYGURU Group, which runs the popular online property portal, has secured S$175 million from three investors including US private equity firm TPG. The other investors are Indonesian media company Emtek Group and Asia-Pacific technology venture capital firm Square Peg Capital, it said on Tuesday.

This shot in the arm came as PropertyGuru seeks to entrench its presence in existing markets of Singapore, Malaysia, Thailand and Indonesia.

Scout24, a minority shareholder of PropertyGuru, will exit to focus on its property and car online classified businesses in Europe.

"IPO is still a very likely option for us in the future," PropertyGuru co-founder and CEO Steve Melhuish told BT, though he declined to state a time frame. "We want to accelerate the growth of the business and take it to the next stage."

The group will continue to focus on product innovation, branding and marketing as well as enhancing its mobile applications for consumers and property agents. Rather than to overstretch, PropertyGuru would "rather be strong in the markets it is already in" by increasing depth and strength of its brand, he said.

PropertyGuru, which has some 300 staff now, has had two earlier rounds of capital injection from investors that raised S$1.8 million in 2008 and S$55 million in 2012.

The investment by TPG, Emtek and Square Peg is expected to complete by mid-June. Each firm will appoint representatives to Property Guru's board. No specific shareholdings were disclosed but no single shareholder will hold more than 40 per cent upon completion.

Ganen Sarvananthan, TPG partner and managing director who heads the South-east Asian business, said that PropertyGuru "represents a great addition to TPG's Asia portfolio" and strengthens its global Internet investment reach. Mr Sarvananthan told BT that while TPG did not invest in PropertyGuru back in 2012 from a "valuation standpoint", it found a "meeting of minds between the founders and other consortium members this time around".

Asked about TPG's exit strategy, he said that the focus now is on creating value post-investment. TPG also owns complementary Internet and real estate companies in its portfolio including Uber, Airbnb, Lynda.com, SurveyMonkey, RentPath and 8990 (Philippines).

PropertyGuru's property search websites is garnering over 11 million consumer visits and 104 million page views every month. It said it has seen a 28 per cent traffic growth each year, with mobile making up 52 per cent of total traffic.

The value of real estate transactions through the PropertyGuru platform is estimated to be S$14 billion per annum - representing 10 per cent of all property transactions in its four markets.

Square Peg co-founder and partner Paul Bassat said: "Square Peg sees tremendous potential for PropertyGuru to continue to innovate and expand on its market leading positions in multiple geographies."

Emtek is already PropertyGuru's partner in Indonesia under a joint venture inked last year to strengthen PropertyGuru's presence there. Emtek's commissioner Jay Wacher noted that this investment in PropertyGuru presents a prime opportunity to deepen its exposure to the online classified's business.

"Our investment is aimed at fast-tracking PropertyGuru's plans to innovate ahead of market needs and extend its leadership in the property space," Mr Wacher said.

There has been a flurry of interest in online property platforms of late. Singapore billionaire Peter Lim purchased a 20 per cent stake in TheEdgeProperty.com, the new property portal of Malaysia's The Edge Media Group, for an undisclosed sum last week.

In November, Singapore Press Holdings snapped up a 60 per cent stake in CoSine Holdings, the holding company of StreetSine Technology Group, for S$30 million. StreetSine Technology Group consists of StreetSine Singapore, StreetSine Hong Kong and the digital platforms Singapore Real Estate Exchange and Hong Kong Real Estate Exchange.

Key structural changes in Singapore are translating to new growth opportunities even in this mature market, Mr Melhuish said. He estimates that the online share of total advertising dollars here could rise from some 10-15 per cent currently to 50 per cent in the next three to five years, tossing up significant growth opportunities.

According to him, PropertyGuru has an 88 per cent market share in Singapore based on "time-on-site" share - measuring how long users spend on its websites vis-a-vis other property websites.

While Indonesia is now the smallest market for PropertyGuru, it is the fastest-growing market yielding a 43 per cent year-on-year jump in the number of visits to its website in the first quarter, Mr Melhuish said.

A growing working population that spurs strong property demand and surging digital technology adoption in Indonesia bores well for the online property portal business, he added.