Online property portal PropertyGuru bags $129M investment

PropertyGuru CEO and co-founder Steve Melhuish on stage at Tech in Asia Singapore 2015.

Online property portal PropertyGuru announced today it has received a whopping S$175 million (US$129.3 million) investment from a “strategic consortium” of three investors. The group consists of Indonesian media company Emtek (which is already PropertyGuru’s partner in Indonesia), venture capital firm Square Peg Capital, and international private investment company TPG. Representatives from all three companies are expected to join PropertyGuru’s board when the deal is completed in mid-June.

(Update, 10/6: This post has been updated with comments by PropertyGuru CEO and co-founder, Steve Melhuish.)

“These investors spent a number of months doing due diligence […] and they have decided this is a good investment. That kind of endorses what we’ve been doing over the last seven and a half years or so,” Steve Melhuish tells Tech in Asia. The opportunity for PropertyGuru, he adds, is that the company operates in markets that are large and growing all the time. The middle class is emerging throughout the region, and real estate remains the most important investment most people will ever do. Melhuish feels the landscape in more mature real estate markets, like Western Europe, is indicative of the opportunity the Southeast Asian markets present.

The investment will fuel PropertyGuru’s expansion in the Southeast Asia region, as well as marketing and “innovation”, according to a statement. “The process of trying to understand the property market, to research it, to find a property, to make a decision on it, and get the best mortgage, is still very scary because of the amount of money involved, but also because of the market’s lack of transparency,” Melhuish says. “And what we’re trying to do is improve that whole process, make it as painless as possible for the person to make a really sensible property decision.”

After a series of improvements to the service in the last year or so, such as redesigned property floor plans, updated and personalized listings, and new algorithms to help score the properties more accurately, Melhuish says the company is constantly thinking about what else it can do to make the consumer’s life easier. It will also invest in branding to make sure it shows up more in online searches and it will also look into possible consolidation opportunities in the markets where it’s active.

Competing with the old guard

PropertyGuru has been the market leader in the online property space in Singapore, with a strong presence in Malaysia, Indonesia, and Thailand (where it’s known as Rumah.com and DDProperty.com respectively). iProperty, as well as Eduardo Saverin-backed 99.co are currently its main competitors in the region, although both Melhuish and 99.co’s Darius Cheung have said their main competition is print media that still rakes in most of the property listings advertising revenue.

“What we see in all the markets, including mature online markets like France, Germany, UK, Australia, China, is that consumption moves online and then the advertising dollars follow, and rapidly catch up,” Melhuish says. “In Southeast Asia so far, consumption is rapidly shifting online, from 30 to 50 percent in some cases. In Singapore we see that about 15 percent of total advertising dollars are online. But we expect that number to get to 50 percent in the next five years. Likewise, in the other markets.”

According to PropertyGuru, its portals attract 11 million monthly consumer visits and 104 million page views. It claims it has had a 28 percent traffic growth per annum, with mobile making up 52 percent of its total traffic across Southeast Asia. Melhuish said during Tech in Asia Singapore 2015 last month that the company will be looking to IPO in about 12 to 18 months.

As Melhuish tells Tech in Asia, that’s still a possibility, although PropertyGuru is keeping its options open. “We’ve got some great investors on board at the moment, and we’re going to work really hard to accelerate the growth of the business with their help in the next few years,” he explains. “Some of that’s determined by the market conditions, some of that’s determined by whether [an IPO] is the right thing for us. But we still have options and we will continue to review them in the next few years.”