TPG, KKR-Backed PropertyGuru Seeks to Raise A$380M in Australian IPO 

Southeast Asia property listings platform PropertyGuru has filed for an initial public offering that could value the media business at A$1.2 billion ($810 million), according to a prospectus lodged with the Australian Securities and Investment Commission this week.

The 12-year-old Singaporean firm, which counts private equity giants TPG and KKR as its largest shareholders, is seeking to raise as much as A$380 million through the public listing on the Australian Stock Exchange.

Based on the prospectus’ quoted price range of A$3.70 to A$4.50, PropertyGuru’s enterprise value on completion of the IPO is projected to fall between A$1 billion and A$1.2 billion.

Capital to Fund Growth Strategy

“The purpose of this offer is to provide funding and financial flexibility to support our future growth strategy, to pay out existing convertible note holders, to enable existing shareholders to partially realise their investment and to broaden our shareholder base,” said PropertyGuru’s chairman, Olivier Lim.

CEO Hari V Krishnan added that the company is mulling a potential expansion into a number of related business segments, including an online mortgage marketplace and data services.

The IPO, which was founded in 2007 by Singapore-based expatriate Steve Melhuish and Jani Rautiainen, expects the retail portion of the offering to commence on 16 October and conclude on 22 October.

Final pricing for the IPO is expected to be announced to the market on 24 October, while the company’s shares are expected to start trading on the stock exchange on 1 November.

Benefiting from a Boom in Online Advertising

Operating its core business in Singapore, Vietnam, Thailand, Malaysia and Indonesia, PropertyGuru counts among its investors TPG, which currently owns 31 percent of the company, and KKR, which holds another 28 percent.

The support of the private equity firms has helped drive PropertyGuru’s transformation from a single-market start-up twelve years ago to an online classifieds giant with 23 million users monthly and a 60 percent share of the online property listings market across the region.

PropertyGuru’s online portals include Indonesia’s Rumah.com, DDproperty.com in Thailand, and Batdongsan.com.vn in Vietnam.

According to the company’s IPO prospectus, total property advertising across its core markets was worth S$949 million ($687 million) last year, and is expected to increase to S$1.2 billion by 2023.

“The market opportunity for online property advertising in our core markets is underpinned by a number of key macroeconomic and other trends,” said Lim. “These include strong population growth, urbanisation, increasing penetration of the internet within the population, increased access to mobile phones, and in particular smartphone penetration, as well as rising wealth levels which has seen the expansion of the middle classes – a key driver of housing demand.”

According to Krishnan, the company’s pro forma revenue has grown at a 26 percent compound annual growth rate over the last three years, driven by the shift from traditional print channels to online property advertising, as property seekers increasingly use the web to search for property.

“Digital innovation is in our DNA and we plan to continue investments in technology with the objective of creating solutions that benefit all our audiences,” Krishnan said.

The company CEO added that 2018 marked the first year that PropertyGuru became both EBITDA and free cash flow positive. The company’s revenue last year was S$55 million – S$34 million of which was from its Singapore business – while it incurred a full-year net loss after tax of S$3.8 million.

S$440M in Funding Rounds

PropertyGuru has raised a total of S$440 million in funding rounds since 2008, according to Crunchbase figures.

Just last year, the firm raised S$200 million from KKR to help fund its acquisition of Vietnamese online listings portal.Three years before that funding round, the company had secured S$175 million from TPG, Indonesia’s Emtek Group and Square Peg Capital.

According to the IPO prospectus, TPG’s current 31 percent interest in the company will be reduced to 26 percent post-IPO, while KKR’s holdings will be slimmed down from just under 28 percent to roughly 23 percent.