PE-backed PropertyGuru buys Malaysia, Thailand assets from REA
PropertyGuru, a Singapore-based real estate portal backed by the likes of TPG Capital and KKR, has acquired REA Group’s property technology assets in Malaysia and Thailand.
As part of the deal, Australia-listed REA – which is best known as the operator of realestate.com.au in Australia and the iProperty brand in Singapore and Malaysia – will take an 18% interest in PropertyGuru. The start-up, which aborted its own attempt at an Australia IPO in 2019, is valued at more than $800 million. TPG and KKR committed an additional $220 million in funding last year.
The assets being absorbed are iProperty.com.my and brickz.my in Malaysia and thinkofliving.com and Prakard.com in Thailand. PropertyGuru said in a statement that the acquisitions will accelerate the realization of its ambition to become Southeast Asia’s leading property technology company.
Founded in 2007, PropertyGuru expanded into Malaysia, Indonesia, and Thailand in 2011 and added Vietnam five years later. It runs locally-focused portals in each market and has made several other bolt-on acquisitions, such as RumahDijual in Indonesia and Batdongsan in Vietnam.
In recent years, it has launched a mortgage marketplace in Singapore and made improvements in the technology offering for real estate agents and developers. These include 360-degree immersive walkthroughs of properties and their surrounding cityscapes in real-time – intended to let developers start marketing projects even before constructing a sales gallery or showing an apartment.
As of 2020, the company claimed to serve 24.5 million users a month and hold a 57% market share across its core geographies, four times that of its nearest competitor.
REA generates most of its revenue from Australia but has interests spanning Asia and the US. In addition to Malaysia and Thailand, it owns Rumah123.com in Indonesia, Squarefoot.com in Hong Kong, and Makaan, Housing.com and Proptiger.com in India. Asia contributed A$47.9 million ($37.2 million) in revenue and A$8.8 million in EBTIDA for the 12 months ended June 2020.
The Malaysia and Thailand businesses were projected to contribute approximately A$15 million in revenue and reduce EBITDA by A$11 million in 2021. REA expects to post an overall gain of A$10 million as a result of the divestment, it said in a filing.
The transaction, which is scheduled to close in July, is conditional on REA offloading iProperty.com.sg, Rumah123.com, and its minority stake in 99 Group, operator of Indonesia’s 99.co.
PropertyGuru’s first external backer was Vulpes Investment Management, which generated a 70x return on its investment. International recognition came in 2012 as Scout24 put in $47 million. It exited three years later when TPG, Square Peg Capital, and Emtek Group invested S$175 million ($129 million). This was followed by a $$200 million Series D commitment from KKR in 2018.
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