Singapore’s leading online property portal, PropertyGuru, was founded in May 2007 with its site officially launched in the following December. The site is still going strong, and recently it raised more than S$60 million (US$49.1 million) from European property portal group, ImmobilienScout24.
Co-founder Steve Mulhuish looked back on when he relocated to Singapore, which eventually led to the founding of the PropertyGuru Group empire. Prior to his stint in Singapore, he worked in a digital media investment advisory firm and various telecoms companies including Cable & Wireless, where he led a global team. Before coming to Singapore he had been traveling around Southeast Asia for six months, and Asia stood out as the place where he wanted to be. In 2005, Steve’s wife was offered a position in Singapore, and the Melhuish family relocated and called it their home.
Back then, Steve and family were residing in the Orchard area but were forced to move because of an ‘en bloc’ activity in 2006. He found that he had to rely on newspapers to find housing options. He tells me:
At short notice, we had to find a new place to live. And we were fairly new to Singapore, being here a year or so. The first thing I did was to look for property online. But there was nothing [there] so we had to rely on newspapers – it was incredibly frustrating and painful process.
Breaking the rules
In 2006, property was a hot topic among Singaporeans. Steve started to research the industry more, particularly what was happening in the US, Australia and Europe. He learned that the property portal market was really big, with leading firms having market capitalizations of anywhere between one to two billion dollars and running with 60 to 70 percent net profit. He said:
The leading online property portals are like a cash machine, a really good business. I thought that the business model works outside of Singapore, but there was nothing like here.
Singaporeans seemed to be obsessed with property. The feedback from locals was really positive, a sign that there was indeed demand for an online property portal in Singapore. Steve recalled that founding PropertyGuru sort of broke his golden entrepreneur rules of always building a startup in a “big market” and in an “industry that you are passionate about”. He laughs, saying, “I chose Singapore, which is a very small market, and property, which I knew nothing about!”
Prior to starting PropertyGuru, Steve was running ComiAsia, a startup for uploading, buying, and selling mobile comics. He was running the startup while also working on PropertyGuru.
He then pitched the PropertyGuru idea to one of ComiAsia’s investors, and the investor connected him with Jani Rautiainen, who was also working on the online property portal idea. Jani was based in Singapore but had a weekday job in India. So initially Jani and Steve worked on PropertyGuru for just two days a week.
Jani has already started coding and thinking about the structure of the site. I think our skills really complement each other. Jani is a super smart guy, and he’s the architect of the whole platform and product while I work on the front end sales, marketing, business development and financing. It worked out really well.
Meeting the competition
Prior to the launch of PropertyGuru.com, there were no other competitors in the online property area. However, just two months prior to the PropertyGuru launch in December 2007, three other sites launched.
Steve and Jani were faced with sudden challenges from Singapore Press Holdings (SPH) and Mediacorp, which launched ST701 and Mocca.com respectively in the same year. Other direct competitors like iProperty launched two months before PropertyGuru was officially out in the market. “We had these three competitors — ST701, Mocca, and iProperty — before we even launched, and that was a little scary,” said Steve.
PropertyGuru bootstrapped and worked without raising any financing for the first 18 months. In August 2008, the startup raised S$2 million, then S$5 million in 2010, and close to S$60 million this year (one of the largest ever financing rounds in Southeast Asia). Over the last five years, PropertyGuru has grown from having 1,000 to 24,000 property agents using its site.
In 2011, the company made the ambitious move of expanding to Malaysia, Thailand, and Indonesia. In hindsight, Steve recalled that it was a big mistake tackling so many countries in one go. He says:
In 2010, we had 70 staff all focusing on Singapore. Then almost overnight we added Malaysia, Indonesia, and Thailand. And so, the teams got so stretched. In hindsight, it was a bit of a mistake, putting the teams under so much pressure and close to breaking point.
PropertyGuru’s expansion plan was a mixture of acquisitions and organic, self-nurtured teams. In December 2010, it acquired North Malaysia’s leading property portal Fullhouse. In 2011, it acquired the top property website, Rumah.com, in Indonesia and DDProperty.com in Thailand. Interestingly, Rumah.com was just a domain name with no team behind it. Steve explained:
Rumah.com was a horrible website back then because the guy behind it wasn’t running it as a business. But because of the domain name, it had really good traffic. We compared Rumah.com and Rumah123 and we bought [the former] because it was basically a domain name with lots of traffic, where we could build on with the PropertyGuru platform and approach. Whereas Rumah123 had an existing business with 40 over people. We felt it was harder to steer the people to the direction we wanted to go, rather than to build from scratch. It was clearly the right decision as Rumah.com has increased its lead and brand to re-enforce its position as Indonesia’s leading property portal.
Business model and future
PropertyGuru makes money in three ways:
- Agents fee: It charges agents a fee to use its platform.
- Advertising: It sells ad spots on its online property and printed newsletter.
- Property developers: It supports the entire campaign for property developers from advertising to sales.
PropertyGuru was profitable in 2009 and 2010, but since then it has focused aggressively on growth with the addition of three new countries and three acquisitions.
Steve says that mobile is playing an increasing critical role for his company. Today 44 percent of PropertyGuru’s users are visiting from mobile devices, and this is expected to exceed 50 percent next year. Steve says that mobile users stretch the usage of the site. For example, the peak time for mobile users are at 8 A.M. and 10 P.M., while desktop peak time is at 10A.M. and 4A.M.. As a whole, traffic is increasing in proportion with mobile traffic. Steve adds:
We are changing the whole approach with a focus on mobile. Mobile is absolutely critical to our business and future. Property buyers typically are making three to five times more inquiries from mobile devices compared to desktop users. I think it’s about the capability of showing what’s nearby using GPS location technology as well as a different browsing behaviour.
PropertyGuru is aiming for an IPO within the next 18 months, depending on the capital market. Steve and his team are very proud to have built a successful home-grown Singapore-based company. Having now established itself in Singapore, Thailand, Malaysia, and Indonesia, PropertyGuru will also be looking to expand to other countries in the region in future.
With 2013 newly installed, we wish PropertyGuru the best of luck. We are also happy to have Steve Melhuish come to speak at our upcoming Startup Asia Singapore 2013 event, on April 4 – 5.