PropertyGuru abandons Australia IPO

The move comes days after Latitude Financial, a PE-owned consumer lending business, pulled the plug on an offering that was slated to raise up to A$1.4 billion. Retail investor appetite for financial sponsor-backed IPOs has been muted in recent years – the last one to raise more than $100 million started trading nearly three years ago – and neither PropertyGuru nor Latitude was able to counteract this.

Both companies said they had strong institutional investor support, but there were concerns about post-IPO trading. Latitude specifically identified concerns about after-market performance as a reason for pulling its offering.

PropertyGuru intended to sell its Chess Depository Interests (CDIs) at A$3.70-4.50 apiece. If they had priced at the top end of the range, the company would have sold 84.5 million CDIs, including 43.9 million held by existing investors. Square Peg Capital, Indonesian’s Emtek, the founders, and members of the management team were planning to take money off the table. TPG Capital and KKR, the largest external shareholders with 30.4% and 27.25%, respectively, would not have sold any shares.

PropertyGuru cited the fact that both investors had entered into voluntary escrow arrangements tying them to the company until February 2021 as evidence of their continued support. It added that the business performance outlook is strong and new funding is currently not required to support operations.

“Despite strong engagement throughout the process with prospective investors, the board and existing shareholders have determined not to proceed with the offer. This decision took into account current IPO market sentiment. Should the company seek new funds to support our identified growth opportunities, we have a committed existing shareholder base as well as access to private capital markets,” Oliver Lim, chairman of PropertyGuru, said in a statement.

Founded in 2007, the company operates digital property classifieds marketplaces in Singapore, Vietnam, Malaysia, Thailand and Indonesia. It claims a 60% market share. PropertyGuru carries more than 2.4 million new property listings every month and publishes over 500 articles intended to offer market insights. It provides information products and services to property seekers to assist them in their searches and sells advertising and listing services to developers and agents.

For the 12 months ended December 2018, PropertyGuru recorded S$59.5 million ($43.6 million) in revenue, up from S$44.8 million the previous year, while EBITDA shifted from negative S$7.9 million to S$4.5 million. Over the same period, the net loss narrowed from S$16 million to S$12.9 million. In the first half of 2019, revenue was S$39 million, EBITDA was negative S$33.5 million, and the net loss was S$43.5 million.

PropertyGuru has raised S$436 million in private funding since inception. TPG, Emtek and Square Peg all participated in a A$175 million Series C round in 2015, while KKR committed S$200 million in Series C funding last October.

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• Topics
• Australasia
• Southeast Asia
• IPO
• Technology
• Real estate
• Singapore
• Australia
• TPG Capital
• Square Peg Capital
• KKR