PropertyGuru public offer sees 59% SPAC redemption rate

Singapore-based proptech major PropertyGuru has said that nearly 59% of shareholders in Peter Thiel-backed SPAC Bridgetown 2 redeemed their shares before approving a business combination between the two companies.

Singapore-based PropertyGuru is expected to go public in the US soon. / Photo credit: PropertyGuru.

SPAC redemptions – seen as an indicator of investor confidence in a successful SPAC merger – allow shareholders to redeem their shares at the original IPO price, potentially leaving the combined company with less money for its future operations. A high redemption rate signals low confidence in a merger.

The spike in withdrawals of PropertyGuru shares comes amid a subdued investor appetite for SPACs, with the average redemption rate hitting 52.4% in the third quarter of 2021, up 21.9% from the previous quarter.

However, Southeast Asian super app Grab bucked the trend by trading on Nasdaq after closing its roughly US$40 billion SPAC merger with almost no redemptions.

See also: PropertyGuru’s revenue and valuation fall for the first time in years

The high redemption rate adds to PropertyGuru’s troubles after the proptech firm pulled the plug on its IPO on the Australian Stock Exchange just two days before the listing in October 2019.

As PropertyGuru attempts to take its company public on March 18, it expects to swing into the positive adjusted EBITDA arena in 2022. The proptech firm expects revenue of US$106.3 million for the year, up 44% from 2021. The increase is bolstered by growth across all its markets in Southeast Asia as the region emerges from the impact of Covid-19.