Ohmyhome IPO raises red flags

Property platform Ohmyhome has become the latest Singapore tech startup to gear up for an IPO. The company intends to raise up to US$16 million though a US listing on the Nasdaq, with a valuation of US$88 million.

In its prospectus, Ohmyhome said it wanted to transform “into a ‘SuperApp’ for property transactions”, providing a “one-stop property solutions platform that addresses all of our customers’ needs along their property journey”. This ranges from listing the property to post-transaction services like renovation and maintenance.

But this seems like a strange time for the company to go public. The current macroeconomic environment is not conducive to tech IPOs, which means Ohymyhome may lock in a lower valuation than it would otherwise.

More importantly, however, it is still a small company. Its target valuation of US$88 million, for instance, pales in comparison to New York Stock Exchange-listed PropertyGuru, which has a market capitalization of around US$705 million. Research has shown that small firms tend to experience IPO underperformance.

A closer look at Ohmyhome and its financials brings up a number of red flags, including a related-party transaction that exaggerates revenue growth in the company’s most recent period – the six months ending June 2022 – compared to the same period a year ago.

Ohmyhome did not respond to Tech in Asia’s request for comments.

But is it really a tech company?

Founded by sisters Rhonda Wong and Race Wong, who respectively serve as CEO and COO, Ohmyhome says it is a “data and technology-driven property technology company,” and that its “use of technology and data” gives it a “key edge” over competitors.

One of its core offerings is brokerage services, which involve facilitating the buying, selling, leasing and renting of properties – much like a traditional real estate brokerage.

The second is emerging and other services. This includes listing and research, mortgage and insurance referral, legal services, and renovation and home services.

In its prospectus, Ohmyhome gives examples of its proprietary technology, including a “property matching technology and algorithm” called Match. Users can submit their property preferences to the platform, and the Match algorithm wil filter through all available listings to produce results that suit users’ preferences.

But this does not seem very different from the basic function on apps like PropertyGuru, where users can filter property listings according to specific criteria.

For now, most of Ohmyhome’s revenues are driven by its brokerage services, accounting for over 85% of total revenue in three of the four periods under review.

Revenue growth not what it seems

Accountants express substantial doubt